HDFC Bank Limited - Q1FY22 Result Report - YES Securities

(Rating: ADD, TP: Rs1,643, Upside: 8%)

- Asset quality: Annualized slippage ratio for 1QFY22 was elevated at 2.54%, with management flagging that most of the restructuring lay ahead

- Margin picture: NIM at 4.1% was down ~10 bps QoQ, breaching the long-term range on the downside, due to loan mix changes, among other factors

- Asset growth: Advances grew 1.3%/14.4% QoQ/YoY driven by corporate loan growth of 3.1%/18.1% QoQ/YoY, with focus on PSU entities

- Opex control: Total opex declined -11.1% QoQ but management guided for a reversion to a cost to income ratio of 38-39%

- Fee income: Fees and commissions declined -22.7% QoQ due to weakness in card business, retail assets and third-party distribution

- We maintain 'Add' rating on HDFCB with a revised price target of Rs 1643: We value the standalone bank at 3.3x FY23 P/BV for an FY22E/23E/24E RoE profile of 15.8/16.8/17.4%. We assign a value of Rs 76 per share to the subsidiaries, on SOTP

Shares of HDFC Bank Ltd was last trading in BSE at Rs.1470.95 as compared to the previous close of Rs. 1521.7. The total number of shares traded during the day was 408272 in over 24820 trades.

The stock hit an intraday high of Rs. 1491 and intraday low of 1466.15. The net turnover during the day was Rs. 603402070.

Source : Equity Bulls

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