Hold HDFC Bank - Emkay

HDFC Bank's Q3FY12 NII at Rs31.1bn and profit at Rs14.2bn – broadly inline. Strong traction in fee income and forex gains compensated for treasury losses.

Key +ves: 21%+ yoy growth in loans and deposits, flat NIM, improvement in LDR and comfortable asset quality. C/Income remains largely stable despite significant branch addition.

Increasing footprint in tier-III to tier-VI cities aided higher growth in retail loans. Deregulation of SB interest rates has had minimal impact with SA deposits at 30% of total deposits.

Remain positive given superior operating matrix and stable asset quality. Valuations at 3.8/3.2x FY12E/FY13E ABV leave limited room for upside. Maintain HOLD with TP of Rs510.

The HDFC Bank stock was trading at Rs.486.65, up by Rs.1.65 or 0.34%. The stock hit an intraday high of Rs.491.80 and low of Rs.470.

The total traded quantity was 1.68 lakhs compared to 2 week average of 1.44 lakhs.

Source : Equity Bulls

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