Views on HDFC Ltd. 4QFY2014 results - Angel Broking

Views of Mr. Vaibhav Agrawal (VP Research – Banking & NBFC, Angel Broking) on HDFC Ltd. 4QFY2014 results:

"HDFC reported in-line standalone earnings performance for the quarter. Earnings adjusted for dividends and sale of investments, for the company grew at 9.9% yoy. Robust Individual advances growth (26% yoy after adding back loans sold in last 12 months) and stability on the overall asset quality front (Gross NPA at 0.69%) were the key highlights from the results. NII for the company grew at 10.9% yoy, on back of lower 15.9% yoy growth in its loan book which was slower as compared to previous quarters reflecting the weak macro environment. Non-interest income for the company came in at Rs. 155cr as compared to Rs. 117 in 4QFY2013. Operating income and pre-provisioning profit grew at 12.0% and 12.2% yoy, respectively, in line-with expectations. Provisioning expenses for the company came in at Rs. 30cr, higher than Rs. 25cr during 4QFY2013. Overall, the company reported standalone earnings growth of 10.8% yoy at Rs. 1,723cr. Currently, HDFC's core business (after adjusting Rs. 274/share towards the value of its subsidiaries) trades at 3.6x FY2016E 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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