HDFC Bank stands out for its strong execution and consistent growth metrics. The high contingent provision at 1% of advances provides additional comfort.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
HDFC Bank Ltd. reported in-line profitability metrics with sequentially stable net interest margin at 3.43% (-3 bps QoQ), reported RoA at 1.9%, and contained opex. Credit costs at 50 bps and slippages at 1.4% were in-line and continue to hold better relative to peers. Though low credit cost was aided by decline in provision coverage ratio (-200 bps QoQ), PCR was stable ex of agri portfolio.
Management remains confident on the strength of asset quality metrics. Lack of net interest margin improvement is led by lower risk weighted intensity and intentional moderation in retail growth. Loan growth is guided to be closer to the system in FY26E and higher versus system in FY27E.
We tweak earnings, factoring in lower growth and slightly improved opex. Maintain ‘Accumulate' rating with unrevised target price of Rs 1950, valuing standalone bank at 2.3 times Sep-26E price-to-book-value and adding subsidiary value.
There is a positive bias on valuations from steady asset quality metrics, but we look for improvement in business growth as a key trigger.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
