The bank’s standalone net profit increased 20 percent year-on-year (YoY) to Rs 10,606 crore, while its net interest income (NII) grew 18.9 percent to Rs 21,021.2 crore against Rs 17,684.4 crore logged in Q2FY22.
HDFC Bank
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Shares of HDFC Bank share price fell 1 percent intraday on October 17 despite the lender posted strong numbers for the quarter ended September 2022.
HDFC Bank on Saturday reported a consolidated net profit of Rs 11,125 crore for the quarter ended September 30 (Q2FY23). The figure was 22.3 percent higher than the profit logged in the corresponding quarter of the previous fiscal.
Also Read | HDFC Bank Q2 result | Here are 5 key earnings highlights
This comes on the back of a strong 23 percent loan growth and pristine asset quality.
The bank’s standalone net profit increased by 20 percent year-on-year (YoY) to Rs 10,606 crore while its net interest income (NII) grew 18.9 percent to Rs 21,021.2 crore against Rs 17,684.4 crore logged in Q2FY22.
Domestic retail loans grew by 21.4 percent while commercial and rural banking loans saw a growth of 31.3 percent. That apart, corporate and other wholesale loans witnessed an increase of 2 percent.
Asset quality of the bank also improved with gross non-performing assets (GNPAs) coming in at 1.23 percent, as against 1.28 percent in the year-ago period. Net non-performing assets (NNPAs) were at 0.33 percent of net advances as on September 30, 2022, as against 0.35 percent in Q1FY23.
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Here is what brokerages have to say about stock and the company post June quarter earnings
Prabhudas Lilladher
HDFC Bank saw a good quarter with core earnings beating estimates by ~5% led by stronger NII and other income (excl. treasury) while asset quality was better. NIM was higher by 9bps due to superior yields driven by faster asset repricing, which is expected to outpace that of liabilities, suggesting that NIM would improve in near term.
We upgrade FY23 earnings by 6% mainly led by higher NIM/NII while there is no material change in FY24/25E PAT. We remain positive on HDFC Bank though near term focus would remain on merger. Valuation is undemanding at 2.3x Sep’24 core ABV. We maintain multiple at 3.0x and Target Price at Rs 1,800. Retain BUY.
Motilal Oswal
HDFC Bank reported a steady quarter with recovery in Core PPoP growth and margins though treasury loss dragged PPoP. Loan growth was driven by a sustained momentum in Retail segment, along with robust growth in Commercial and Rural Banking as well as Wholesale loans.
Asset quality ratios remained robust, while the restructured book moderated to 53bp of loans. Healthy PCR and a contingent provisioning buffer provided comfort on asset quality.
We estimate HDFC Bank to deliver ~19% PAT CAGR over FY22-24, with an RoA/RoE of 2.0%/17.2% in FY24. Maintain buy with a Target Price of Rs 1,800 (premised on 3x FY24E ABV).
We expect the stock to perform gradually as revenue and margin revive further while the merger-related overhang ebbs as HDFCB looks to complete the merger by 1Q/2QFY24E.
Nirmal Bang
Aggressive branch expansion is leading to higher opex cost and is likely to remain elevated in the short term as the focus is to expand the distribution network. Credit cost stood at 87bps vs 130bps in 2QFY22 and is expected to remain range-bound as the bank continues to carry excess provisions.
Asset quality improved on a sequential basis, led by declining delinquencies. We expect earnings growth to remain strong and estimate FY25E ROA/ROE at 1.9%/17.1%. However, we remain cautious about merger transition, which along with elevated opex and margin trajectory would be key monitorables going forward.
We maintain buy on HDFC Bank with a target price (TP) of Rs 1,805 (2.8x 1HFY25E ABVPS + value of subsidiaries).
Nomura
We maintained buy rating on the stock with target at Rs 1,690 per share.
The Q2 was a beat on lower provisions.
We revise FY23/24/25 EPS estimates by +4.8%/-0.8/-2.7% and forecast 15.5% & 16.2% EPS & core BV CAGR over FY22-25, reported CNBC-TV18.
Morgan Stanley
According to Morgan Stanley, the profit was strong at 20% YoY led by revenue growth. The core PPoP growth has been on a sustained rebound, while margin has improved & has an upside risk.
Morgan Stanley expect 19-20% core PPoP growth in FY24/FY25, reported CNBC-TV18.
CLSA
The bank continue to deliver best-in-class loan growth of 23% YoY, said CLSA.
Broking house increases FY24-25 estimates by 1.5-2% and expect an RoE of 17.5% by FY24-25, reported CNBC-TV18.
Credit Suisse
The company strong operating performance, led by pick up in topline growth, while asset quality stable with net slippage at 90 bps & credit costs at 100 bps, said Credit Suisse.
The NPL cover is strong at 73% & contingent provisions of 65 bps. It is well capitalised & it remains among fastest growing banks, reported CNBC-TV18.
At 09:43 hrs HDFC Bank was quoting at Rs 1,435.55, down Rs 5.55, or 0.39 percent on the BSE.
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