HDFC Bank - March 2013 Results Preview - Motilal Oswal

- On the back of healthy retail demand, HDFCB is expected to deliver above industry average loan growth of ~25% YoY. Deposit growth is expected to be at 18% YoY.

- Margins are expected to moderate by ~10bp QoQ. Hence, NII growth is expected to be muted at 2% QoQ, and grow 14% YoY.

- Non-interest income is expected to be strong at 28% YoY led by healthy fee income growth of ~19%, helped by a lower base. Also, profit on sale of investments, against a MTM loss of INR715b in 4QFY12, would provide a cushion.

- Asset quality is expected to remain healthy. However, stress in few segments of retail loans has increased, which needs to be watched.

- The stock trades at 3.5x FY14E and 2.9x FY15E BV, and 16.6x FY14E and 13.3x FY15E EPS. Maintain Neutral.

Source : Equity Bulls

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