HDFC Bank Q4 Results Review - Core Performance Inline; Margins Improve QoQ: Motilal Oswal

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..Motilal Oswal Report.HDFC Bank Ltd. delivered a healthy quarter, with net interest margins improving 4 bp QoQ and the credit-deposit ratio declining 6% QoQ to 104%. Profit after tax (adjusted for one-offs) and net interest income both stood in line with our estimates. HDFC Bank prudently deployed the stake sale gains from Credila (Rs 3.4 billion) and tax credit to further strengthen the balance sheet as it made floating provisions of Rs 109 billion during the quarter. Opex jumped as the bank made Rs 15 billion of staff ex-gratia provisions; however, the adjusted credit-income stood at 41.3%. Gross non performimg asset ratio improved 2 bp QoQ to 1.2%, while provision coverage ratio was largely flat at 74%. Fresh slippages increased marginally to Rs 73 billion or 1.2% of loans. Over FY24-26, we estimate HDFC Bank to deliver 13.5%/18% compound annual growth rate in loans/deposits and 16% CAGR in earnings, translating into return on asset/return on equity of 1.9%/15.5% by FY26.  We reiterate our Buy rating with a target price of Rs 1,950 (premised on 2.4 times FY’26E adjusted book value plus Rs 253 for subs)..Click on the attachment to read the full report:.HDFC Bank Q4 Results Review - Inline; Building In Resilience: Dolat Capital.DISCLAIMERThis 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.

HDFC Bank Q4 Results Review - Core Performance Inline; Margins Improve QoQ: Motilal Oswal

Prudently deploys one-off gains to boost floating provisions

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