HDFC Bank - 3QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP- Research - Banking, Angel Broking) on HDFC Bank 3QFY2014 results:

"HDFC bank continued its trend of delivering consistent earnings performance quarter after quarter and registered a bottom-line growth of 25% yoy for 3QFY2014. The bank's loan book grew by 22% yoy (partly on account of money lent for FCNR (B) deposits) and aided NII growth of 17% yoy. Margins for the bank declined by around 10bp qoq to 4.2%. Non-interest income for the bank expectedly grew at moderate pace of 11%. While, operating income grew by 15%, opex grew at subdued pace of 4% yoy (even lower than our expectations of 7% yoy increase) which aided pre-provisioning profit to grow by 25% yoy. On the asset quality front, the absolute gross and net NPA levels for the bank, increased by 3-4% qoq, respectively, which given the context of current macro challenges and low base for the bank, appears to be a moderate increase. Overall, the bank reported earnings growth of 25% yoy. In light of current macro environment, the current earnings trajectory of 25%+ yoy is impressive and much better than other large private peers, which in our view, justifies a premium valuation multiple. Hence, we recommend Accumulate rating on the stock."

Source : Equity Bulls

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