HDFC - Results in line - Emkay

- HDFC Q1FY13 NII at Rs12.6bn / rep. PAT - Rs10bn - inline with our estimates. Individual loan portfolio grew 22.5% yoy and have alleviated fears of intensifying competition.

- Lower share of corporate loans was off-set by upward repricing of teaser loan portfolio, thereby protecting spreads at 2.27% levels. Borrowings largely in nature of bonds / deposits.

- Minimal concerns on NPA; cumulative provisioning at 1.2% of loans. With stringent credit appraisal system factoring sub-10bps of credit cost. Adequately capitalized for growth.

- Steady loan growth, stable margins and lower credit cost to ensure RoA in excess of 2.5%. Current valuations leave limited room for upside. Maintain HOLD with tp of Rs700.

Source : Equity Bulls

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