Prabhudas Lilladher's research report on HDFC Bank
HDFCB saw a good quarter with core PAT of Rs118bn beating PLe by ~6% led by stronger NII and other income (excl. treasury) while provisions were lower. NIM was higher by 11bps at 4.84% due to superior yields driven by faster asset repricing, while cost of funds was a tad lesser. Retail wholesale mix improved QoQ from 43:57 to 45:55 led by stronger retail accretion (due to healthy consumption spends) and de-growth in corporate (owing to pricing pressure and widening bond spreads). Retail deposit accretion was strong at 5% QoQ and its share is now 84% (80% in Mar’22). Bank added 684 branches in Q3FY23 while it intends to add 600 more branches in Q4FY23 which would keep opex elevated. We upgrade FY23 earnings by 3% led by higher NII and lower provisions.
Outlook
Valuation is at 2.6x Sep’24 core ABV. Maintaining multiple at 3.0x, we raise TP to Rs1,850 from Rs1,800. Retain BUY.
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