HDFC Bank - Inverted funnel - strong earnings growth in tough times - Emkay

Reco: HOLD
CMP: Rs 728
Target Price: Rs 760

- Tight costs plus superb asset quality drive inverted funnel growth: revenue +14% yoy, PPOP +28% yoy, PBT + 31% yoy. Higher tax rate drives lower PAT growth at 23%

- NIM's expanded by a healthy 20bps qoq helped by 374bps qoq improvement in CASA mix and 10%qoq decline in borrowings

- Asset quality holds up superbly - remains healthy with GNPA/ NNPA ratio stable at 1%/0.3%. Provision cover also maintained at 73%

- Superior RoA of 1.9% delivered without compromising on provision coverage or asset quality for FY14. With recent run up in the stock price, assign HOLD; retaining TP of Rs760

Source : Equity Bulls

Keywords