HDFC Bank’s share price explained more than 3 percent at the beginning of trading on April 18 after the company stated the fourth quarter last week.
HDFC Bank on April 16 reported growth of 23 percent year-on-year (yoy) in independent net profit at Rs 10,055.2 Crore for the quarter that ended March 2022 because poor loan provisions fell 29 percent, with further increase in asset quality.
A year back, Mandiri profit reached Rs 8,186.51 Crore.
Net interest income (NII), the difference between the interest obtained and the interest incurred, increased by 10.2 percent YoY to Rs 18,872.7 Crore in Q4, with credit growth of nearly 21 percent and 16.8 percent of growth in deposits.
“The core net flower margin is at 4 percent of total assets, and 4.2 percent based on productive-productive assets, the Bank said in BSE filing on April 16.
This is what the broker said about stock and company after income Q4:
Prabhudas Lilladher.
Pat HDFCB at Rs 100.6 billion is Miss (Ple: Rs 115.04 billion), because of the weakness of NII and other income, although Opex is lower. The quality of stable assets and OTR pools is 1.1 percent of loans.
NII traction remains softer than loan growth due to non-retail focus. ACretion HDFCB credit in the past has recently been led by wholesalers and CRB, because credit standards are tightened in retail because of Covid. This has become a margin barrier.
The loan mixture in terms of non-retail / retail stands at 61/39 compared to 50/50 pre-pandemic. The balance sheet strength is recommended by 70 percent-plus PCR, contingent provisions at 71bps and CET-1 from 16.7 percent.
However, Roe Near-term (FY23 and FY24) can remain at 16-17 percent as a comment shows that the positive effect on the NIM can come from faster retail credit ofttake, can take 4-6 quarters to realize and Casa rises, Casa shares is estimated to be moderate.
We reduce our path for FY23E / 24E of 6 percent, because NII is lower and other income. Therefore, we cut our double target from 3.6x to 3.2x in March 2024 ABV and cut our target price from Rs 2,000 to Rs 1,740. Maintain purchases.
Credit Suisse.
There is a strong growth trend, while NIM remains soft. The capital level remains strong and increases EPS estimates by 2-3 percent.
Credit Suisse expects ROE 16-17 percent, report CNBC-TV18.
CLSA.
Q4 is mixed with strong growth & low opex growth, while NIM will only recover gradually.
The bank will hit the cost of expansion of distribution on FY23, and expects high income resistance.
CLSA chose ICICI Bank, AXIS Bank and SBI on HDFC Bank, reported CNBC-TV18.
Research LKP
HDFC Bank is expected to outperform this sector led by (1) healthy balance sheet growth, (2) provisions that are far higher than the regulatory requirements in the balance sheet, (3) strong capital bearings of 17.9 percent at the TIER1 level and (4) management practices guarantee and risk management in the class.
Given these forces, we hope that HDFC Bank remains one of the best among all business loans. Thus, we continue to maintain a purchase rating at the bank with the target price of Rs 1,831.
Oswal Maleral.
HDFC Bank continues to provide strong business growth of V / S of his colleagues, which results in market share profits. This is driven by sustainable momentum in the retail segment along with strong growth in commercial and rural banking and sharp pickup in wholesale loans.
NII and PPOP growth stands simple due to a decrease in margins even as floating income because of benign credit costs despite making additional contingent provisions.
The asset quality ratio has increased, while the book that is restructured is too much moderated to 1.14 percent of loans. Healthy PCR and the allowance for providing contingents provide comfort on asset quality.
We estimate HDFCB to send 20 percent Pat CAGR through FY22-24, with ROA / ROE 2.1 percent / 17.8 percent in FY24. We maintain our purchase rating at RS 1,850 target prices.
