Hold HDFC Ltd - TP Rs.681 - Geojit BNP Paribas Financial Services

- Maintain 'hold' rating on HDFC with a target price of Rs.681 over one year.

- Company has reported healthy earnings for 1QFY13 due to steady loan growth and stable spreads.

- 1QFY13 net profit at Rs.1001.9 crore increased 18.6% yoy and is in line with market expectations.

- NII was strongly up 26% on 19.4% growth in advances.

- Spreads remained stable at 2.27% against 2.3% in 1QFY12.

- Asset quality remained healthy with GNPA at 0.79% and provision coverage of 114%.

- Individual loans grew at a strong 29% yoy and 8% qoq while non- individual loans were up 14% yoy and 2% qoq.

- Last few quarters have seen a trend of accelerating individual loan growth and moderating corporate loan growth. This trend is positive and it is likely to persist in the medium term.

- Company's loan book is expected to grow at18- 20% in FY13 with stable spreads and healthy fee income growth.

- The stock is rated to 'hold' as the valuation appears fair.

Source : Equity Bulls

Keywords