Q3FY21 Result update - HDFC Bank - ICICI Direct

HDFC Bank posted steady performance for the quarter with largely stable asset quality and steady business growth. Loan book increased 15.6% YoY, 4.2% QoQ to Rs. 10.8 lakh crore. Growth in the retail segment remained tepid on yearly basis, up 5.1% YoY, but sequential growth was healthy at 4.1% QoQ, inspite of impact led by restriction put by RBI on new credit card customers and some activities under Digital 2.0 programme due to outage. Growth in corporate segment continued to remain healthy at 25.5% YoY. On liabilities, the bank witnessed healthy deposit accretion at 19.1% YoY and 3.4% QoQ to Rs. 12.7 lakh crore, mainly driven by higher traction in CASA deposits at 29.6% YoY to Rs. 546747 crore. As a result of higher CASA trajectory, CASA ratio increased 348 bps YoY, 140 bps QoQ to 43.0%. Retail contributed remained at 80% of total deposits.

Valuation & Outlook

Digital initiatives and increasing economic activity are seen propelling retail credit growth ahead. This, coupled with healthy traction in corporate disbursement to keep business momentum ahead of industry. Healthy collection at 97% and contingent provision at ~90 bps of advances provides cushion against asset quality volatility. Capital adequacy of 18.9% & operational efficiency provide confidence on future earnings growth. Thus, we remain positive on the bank. Rolling on FY23E estimates, we maintain our BUY rating with a revised target price of Rs. 1700/share, valuing the core bank at ~3.7x FY23E ABV and adding Rs. 50 in lieu of subsidiaries.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HDFCBank_Q3FY21.pdf

Shares of HDFC Bank Ltd was last trading in BSE at Rs.1483.2 as compared to the previous close of Rs. 1466.35. The total number of shares traded during the day was 804650 in over 24688 trades.

The stock hit an intraday high of Rs. 1503 and intraday low of 1467.95. The net turnover during the day was Rs. 1198278668.

Source : Equity Bulls

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