HDFC Bank - Q2FY21 Result Update - ICICI Securities

Posted On : 2020-10-19 11:05:30( TIMEZONE : IST )

HDFC Bank - Q2FY21 Result Update - ICICI Securities

HDFC Bank posted a stable and steady performance on an overall basis considering the fact that the overall business environment was impacted by the Covid-19 pandemic. Loan book during the quarter increased 15.8% YoY, 3.5% QoQ to Rs. 10.38 lakh crore. Growth in the retail segment remained tepid, up 5.3% YoY and 2.1% QoQ but growth in the corporate segment continued to remain healthy at 26.8% YoY, 4.7% QoQ.

Valuation & Outlook

Digital initiatives and strong festive tie-ups are seen propelling retail credit growth ahead. This, coupled with healthy traction in corporate disbursement is seen keeping business momentum ahead of industry. Improvement in collection at 97% and contingent provision at ~75 bps of advances provides cushion from high volatility in asset quality and earnings. Though the management refrained from providing indication on restructuring, improving collection is seen keeping the quantum in lower single digits. Adequate capital with CaR at 19.1% and healthy internal accrual and operational efficiency provide confidence on future business and earnings growth. Thus, we remain positive on the bank and maintain our BUY rating with a revised target price of Rs. 1450/share, valuing the core bank at ~3.8x FY22E ABV and adding Rs. 50 in lieu of subsidiaries.

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Shares of HDFC Bank Ltd was last trading in BSE at Rs.1199 as compared to the previous close of Rs. 1169.15. The total number of shares traded during the day was 401346 in over 12293 trades.

The stock hit an intraday high of Rs. 1203 and intraday low of 1172.95. The net turnover during the day was Rs. 478414159.

Source : Equity Bulls