KR Choksey's research report on HDFC Bank
PAT grew 18.1% YoY/16.6% QoQ, driven by advance growth of 15.6% YoY growth. NIMs were 4.1%, lower by 19 bps QoQ driven by the liquidity drag. Retail assets grew 5.2% YoY and wholesale grew 14.9% YoY. Deposit grew 19.1% YoY (3.4% QoQ) with CASA improving to 43%, higher by 141bps QoQ driven by healthy customer acquisition. The CD ratio improved slightly at 85.1%. Term deposits grew 12.2% YoY. The incremental deposits were retail deposits. Other incomes grew 11.6% YoY/22.2% QoQ driven by trading gains and fees incomes. The GNPA were 0.8% on account of the standstill by the SC. Ex the same it was 1.38% - largely at the same levels as the last quarter and year. The core credit costs were 1.25% lower by 16 bps QoQ. CAR was at 18.9% and Tier 1 was 16.8%.
Outlook
We expect an ROA of 2.2% by FY23, improving from 1.9% in FY21. We value the bank at 3.5xFY23E P/ABV, implying 4.1x FY22E P/ABV. We maintain our “ACCUMULATE” rating at a target price of INR 1,671 with an upside of 12.7% from CMP.
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