HDFC Bank Ltd. saw loan growth across retail, wholesale, and commercial portfolios in the quarter ended March.
The private lender's retail loans were up 15% year-on-year and 5% over the preceding three months, according to its business update released on the bourses.
Wholesale loans up 17.5% year-on-year and 11.5% sequentially.
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Commercial and rural banking loans up 30.5% year-on-year and 10% quarter-on-quarter.
HDFC Bank saw its advances rise 20.9% over the year earlier to Rs 13.7 lakh crore. Its deposits grew 16.8% year-on-year to Rs 15.6 lakh crore.
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CASA deposits rose 22% over the year earlier. CASA ratio stood at 48% as of March 2022 compared with 46.1% as of March 2021 and 47.1% as of December 2021.
HDFC Bank added 563 branches in Q4, leading to a network of 6,342 branches against 5,779 as of December 2021.
Here's what analysts have to say about HDFC Bank's Q4 business update...
Morgan Stanley
Maintains 'overweight' with target price Rs 1,800 apiece—an implied return of 23.98%.
Initial update points to very strong growth in loans and retail deposits and continued market share gains.
Loan growth was strong in retail and commercial, with a big surprise in corporate banking.
Deposit growth accelerated to 16.8% YoY, higher than the system.
Wholesale loan growth was strong at 11.5% QoQ. while commercial and rural loan growth rose to 30.5% YoY.
Jefferies
Reiterates 'buy' with target price at Rs 2,160—an implied return of 43.43%.
Q4FY22 pre-quarter release shows improving momentum across parameters.
Loan growth rose to 8.6% QoQ vs 5% in Q3FY22.
Improvement was visible across categories, retail, commercial and corporate.
CASA deposits rose 10% QoQ and CASA ratio improved to 48%.
Continued improvement in loan growth should reflect in top line growth soon.
Sustained growth momentum is likely to aid re-rating.
Emkay Global
Reiterates 'buy' with a target price of Rs 2,050—an implied return of 36.1%.
Bank reported higher-than-expected credit growth of 21% YoY, led by strong traction in low-margin corporate and commercial/rural banking portfolios.
Lender retained housing loans to Rs 8,100 crore on assignment from HDFC Ltd.
Deposit growth remains healthy at 17% YoY with retail deposit growth at 19% YoY
Expects NPAs to trend down for most banks, including HDFC Bank, due to better collection trends seen in retail portfolios.
The bank may decide to partially reverse some Covid contingent provisions in a bid to boost profitability.
Recent lifting of a prolonged embargo on digital initiatives and strong business growth in Q4 should have a positive rub-off on the stock.
The bank's unsecured retail loan growth should reaccelerate as the risk-aversion is receding and embargo on cards are being lifted.
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