Q4FY21 Result Update - HDFC Bank - ICICI Direct

HDFC Bank's performance was stable on various parameters like business growth, asset quality and profitability. Business growth continued to show improvement for past three quarters as advances were up 4.7% QoQ, 14% YoY to Rs. 1132837 crore. Loan growth was led by wholesale book, which was up 27.1% YoY while retail book increased 6.7% YoY. Within the retail book auto and home loans have shown a sequential pickup while credit card business trajectory has shown a decline due to RBI's curb on sourcing of new customers. Deposit accretion was healthy at 16.3% YoY and 5% QoQ increase to Rs. 1335060 crore. CASA deposits reported even stronger growth of 27% YoY. As a result, the CASA ratio increased from 43% in the previous quarter and 42.2% in previous year to 46.1% in Q4FY21.

Valuation & Outlook

Focus on business growth with strong revival in retail advances remains positive. Healthy deposit franchise is seen keeping margins at ~4.2%, with a strong recovery in fee based income and steady operational efficiency to support core performance. Robust asset quality performance amid tight underwriting standard and contingency buffer of ~60 bps provide comfort against uncertainties in the current environment. Beefing up technology and enhancing digital capabilities is underway to address outage issues. We broadly maintain our earnings estimate and maintain our BUY rating with an unchanged 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_Q4FY21.pdf

Shares of HDFC Bank Ltd was last trading in BSE at Rs.1428.45 as compared to the previous close of Rs. 1430.15. The total number of shares traded during the day was 306955 in over 15757 trades.

The stock hit an intraday high of Rs. 1444.95 and intraday low of 1423.4. The net turnover during the day was Rs. 440657700.

Source : Equity Bulls

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