Views on HDFC 3QFY2014 results - Angel Broking

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

"HDFC reported in-line standalone earnings performance for the quarter. PBT level earnings, adjusted for dividends and sale of investments, for the company grew at healthy pace of 17%, in-line with expectations. Robust Individual advances growth (24% yoy) and stability witnessed on the overall asset quality front (Gross NPA at 0.77%) were the key highlights from the results. NII for the company grew at 17% yoy, largely aided by healthy 19% yoy growth in its total loan book. Non-interest income for the company came in at Rs. 46cr as compared to Rs. 104 in 3QFY2013. Operating income and pre-provisioning profit grew at 13% and 12% yoy, respectively, in line-with expectations. As expected, provisioning expenses for the company came in at Rs. 25cr, lower than Rs. 40cr during 3QFY2013. Overall, the company reported standalone earnings growth of 12% yoy. The stock has surged significantly from the lows witnessed in the month of September 2013 and currently, HDFC's core business (after adjusting Rs. 321/share towards the value of its subsidiaries) trades at 3.5x FY2015E ABV, which in our view, offers limited scope for upside here on. Hence, we maintain our Neutral rating on the stock."

Source : Equity Bulls

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