HDFC Bank - Positives aplenty but priced in - Emkay

HDFC Bank Q2FY13 adj. NII / PAT - inline with estimates. Stellar show on fee income (+22% yoy) and lower provisions offset the MTM losses on debt mutual fund investments.

- Loan growth at 23% yoy remained broad based. NIM declined 10bps qoq to 4.2% driven by 20bps reduction in base rate in Q1FY13. Recent deposit rate cuts should cushion NIM in H2.

- 300+ new branch in tier III-VI cities and product roll out in newer branches can sustain high loan growth. Restricting loan growth to 22% looking at historical seasonality.

- Strong growth in loans, healthy CAR and lower delinquencies put HDFCB in higher orbit than peers. Valuations at 4.3x/3.6x FY13/FY14 ABV leave limited room for upside.

Source : Equity Bulls

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