HDFC Bank after Q4 Earnings | What should investors do: Buy, sell, or hold?


Net interest income (NII) increased 10.2 percent YoY to Rs 18,872.7 crore in Q4.


April 18, 2022 / 09:49 AM IST



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HDFC Bank share price shed more than 3 percent in the early trade on April 18 after the company declared its fourth quarter numbers last week.

HDFC Bank on April 16 reported a 23 percent year-on-year (YoY) growth in standalone net profit at Rs 10,055.2 crore for the quarter ended March 2022 as bad loans provisions declined 29 percent, with further improvement in asset quality.

A year back, the standalone profit stood at Rs 8,186.51 crore.

Net interest income (NII), the difference between interest earned and interest expended, increased 10.2 percent YoY to Rs 18,872.7 crore in Q4, with credit growth of nearly 21 percent and 16.8 percent growth in deposits YoY.

“Core net interest margin was at 4 percent on total assets, and 4.2 percent based on interest-earning assets, said the bank in its BSE filing on April 16.

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Here is what brokerages have to say about the stock and the company after its Q4 earnings:

Prabhudas Lilladher

HDFCB’s PAT at Rs 100.6 billion was a miss (PLe: Rs 115.04 billion), due to weaker NII and other income, although opex was lower. Asset quality was stable and OTR pool is 1.1 percent of loans.

The NII traction remained softer than loan growth due to non-retail focus. HDFCB’s credit accretion in the recent past has been primarily led by wholesale and CRB, since credit standards were tightened in retail due to COVID. This has been a drag on margins.

Loan mix in terms of non-retail/retail stands at 61/39 compared to 50/50 pre-pandemic. Balance sheet strength is suggested by a PCR of 70 percent-plus, contingent provisions at 71bps and a CET-1 of 16.7 percent.

However, near-term RoE (FY23 and FY24) could remain at 16-17 percent as commentary suggests that the positive effect on NIM that could emanate from faster retail credit offtake, may take 4-6 quarters to materialize and as rates rise, CASA share is expected to moderate.

We reduce our PAT for FY23E/24E by 6 percent each, owing to lower NII and other income. Hence, we cut our target multiple from 3.6x to 3.2x on March 2024 ABV and trim our target price from Rs 2,000 to Rs 1,740. Retain Buy.

Credit Suisse

There was a strong growth trends, while NIM remains soft. The capital levels remain strong and increases EPS estimates by 2-3 percent.

Credit Suisse expect RoE of 16-17 percent, reported CNBC-TV18.


The Q4 was mixed with strong growth & low opex growth, while the NIM will only gradually recover.

The bank will upfront distribution expansion costs in FY23, and expect earnings resilience to remain high.

CLSA prefer ICICI Bank, Axis Bank and SBI over HDFC Bank, reported CNBC-TV18.

LKP Research

HDFC Bank is expected to outperform the sector led by (1) healthy balance sheet growth, (2) much higher provision than regulatory requirement in the balance sheet, (3) strong capital cushion of 17.9 percent at Tier1 level and (4) best-in-class underwriting and risk management practices.

Given these strengths, we expect HDFC Bank to remain one of the best among all the lending business. Thus, we continue to maintain buy rating on the bank with target price of Rs 1,831.

Motilal Oswal

HDFC Bank continued to deliver strong business growth v/s its peers, resulting in market share gains. This was propelled by a sustained momentum in Retail segment along with robust growth in Commercial and Rural Banking and a sharp pick-up in wholesale loans.

NII and PPoP growth stood modest due to a decline in margins even as earnings were buoyant because of benign credit cost despite making additional contingent provisions.

Asset quality ratios have improved, while the restructured book too moderated to 1.14 percent of loans. Healthy PCR and contingent provisioning buffer provide comfort on asset quality.

We estimate HDFCB to deliver 20 percent PAT CAGR over FY22-24, with an RoA/RoE of 2.1 percent/17.8 percent in FY24. We maintain our BUY rating with a target price of Rs 1,850.

HDFC Bank remains one of our preferred buys and we expect the stock to recover gradually as revenue and margin revive over FY23, while clarity emerges on several aspects related to the merger with HDFC Ltd.

Arihant Capital

HDFC Bank has reported mixed performance during Q4FY22 as business momentum was strong while NII and PPoP came in lower then estimates.

Increased share of lower yielding products has resulted into decline in margins while credit cost of the bank was lower due to higher addition of secured and safer assets. Momentum on business growth front leading to market share gain, adoption of digital capabilities and aggressive focus on liability profile will lead the bank to deliver steady state RoE profile of 17-18 percent.

We marginally increase our estimate by 2-3 percent for FY23-24E and maintain our buy rating on the stock with a revised target price of Rs 1,864 (earlier Rs 1,910), based on 3.4x FY24E P/ABV. At CMP, stock is trading at 2.7x to its FY24E ABV.


We believe that the bank is on an accelerated growth path with robust advances growth led by retail and commercial segments and better asset quality. Advances are likely to clock a CAGR of 17 percent over FY23 to FY25.

The bank’s continuous building up of its digital infrastructure and franchise network is likely to bode well for growth going ahead.

We believe that the bank now has sufficient drivers in terms of asset quality, reasonable provision buffers and appropriate asset mix to drive sustainable growth going forward.

The bank is well capitalised and has the ability to manage asset quality across cycles and deliver superior return ratios and reap opportunities from a revival in the economy going ahead. We maintain a buy rating with a revised price target of Rs 1,800.

At 9:23am, HDFC Bank was quoting at Rs 1,428.35, down Rs 36.50, or 2.49 percent on the BSE.

Disclaimer: The views and investment tips expressed by investment experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.

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