HDFC Bank - Strong other income offsets muted NII growth - quant

HDFCB reported 2Q FY14 PAT of Rs19.82 bn, reporting 27% y-y growth, led by strong other income and controlled provisions.

- NII stood at Rs44.76 bn, below our estimate of Rs45.87 bn, as margins compressed by ~25bp during the quarter.

- Both advances and deposit growth moderated to 16% y-y/14% y-y vs 23% yy/19% y-y at this time last year.

- Asset quality deteriorated with both gross and net NPLs increasing by 8% q-q / 11% q-q respectively while coverage ratio held stable at ~74%.

- We retain our earnings estimate and PT of Rs750 based on 3.5x (unchanged) FY15E ABVS of Rs214 and 16.0x FY15E EPS of Rs47.

Source : Equity Bulls

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