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HDFC Bank- Going strong yet again…
HDFC Bank delivered another quarter of 30+% YoY growth in PAT in
Q4FY11. NII of | 2839 crore and PAT of | 1114 crore beat our and Street
estimates by a thin margin. Advances and deposits grew 27% and 25%
YoY, to | 159983 crore and | 208586 crore, respectively. For FY12E, we
expect the bank to grow its balance sheet by 19% and expect a YoY
jump of 31% in PAT to | 5152 crore. The board of directors have also
approved a stock split of 1:5 (resulting in nominal value of | 2 each),
subject to required approvals.
τ CASA @51% supports NIM at 4.2%
The reported CASA (adjusted for one-off in current account deposits)
stands at 51%. This, along with higher retail proportion of ~50% (of
total loan book), helped the bank to maintain NIM at 4.2%. The bank did
envisage the pressure to manage CASA at 50%. Hence, term deposit
rates have inched up significantly recently. We believe the bank will be
able to maintain average CASA of 50% in the coming period.
τ Asset quality provides comfort
Asset quality continued to remain healthy with GNPA@1.1% against
1.4% in FY10. NNPA stood at 0.2%, down from 0.3% in FY10. PCR (not
including write-offs, technical or otherwise) was at 82.5% for FY11
compared to 74.8% in FY10. Total restructured loans (including
applications received and under process for restructuring) were at 0.4%
of advances, of which 0.1% has already slipped into NNPA. We expect
stable asset quality, going ahead.
τ Distribution platform expands, C/I ratio stable
The bank added 206 branches in Q4FY11, 261 in FY11. The branch
network now stands at 1986 and 5471 ATMs. Despite aggressive growth
in the distribution platform, the CI ratio was stable at 49%.
Valuation
At the CMP of | 2310, the bank is trading at 3.9x ABV and 21x EPS for
FY12E. The bank has historically commanded premium multiples and is
expected to continue with the trend, going ahead. We value the bank at
4.3x FY12E ABV and arrive at a fair value of | 2560 and recommend BUY.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HDFC Bank- Going strong yet again…
HDFC Bank delivered another quarter of 30+% YoY growth in PAT in
Q4FY11. NII of | 2839 crore and PAT of | 1114 crore beat our and Street
estimates by a thin margin. Advances and deposits grew 27% and 25%
YoY, to | 159983 crore and | 208586 crore, respectively. For FY12E, we
expect the bank to grow its balance sheet by 19% and expect a YoY
jump of 31% in PAT to | 5152 crore. The board of directors have also
approved a stock split of 1:5 (resulting in nominal value of | 2 each),
subject to required approvals.
τ CASA @51% supports NIM at 4.2%
The reported CASA (adjusted for one-off in current account deposits)
stands at 51%. This, along with higher retail proportion of ~50% (of
total loan book), helped the bank to maintain NIM at 4.2%. The bank did
envisage the pressure to manage CASA at 50%. Hence, term deposit
rates have inched up significantly recently. We believe the bank will be
able to maintain average CASA of 50% in the coming period.
τ Asset quality provides comfort
Asset quality continued to remain healthy with GNPA@1.1% against
1.4% in FY10. NNPA stood at 0.2%, down from 0.3% in FY10. PCR (not
including write-offs, technical or otherwise) was at 82.5% for FY11
compared to 74.8% in FY10. Total restructured loans (including
applications received and under process for restructuring) were at 0.4%
of advances, of which 0.1% has already slipped into NNPA. We expect
stable asset quality, going ahead.
τ Distribution platform expands, C/I ratio stable
The bank added 206 branches in Q4FY11, 261 in FY11. The branch
network now stands at 1986 and 5471 ATMs. Despite aggressive growth
in the distribution platform, the CI ratio was stable at 49%.
Valuation
At the CMP of | 2310, the bank is trading at 3.9x ABV and 21x EPS for
FY12E. The bank has historically commanded premium multiples and is
expected to continue with the trend, going ahead. We value the bank at
4.3x FY12E ABV and arrive at a fair value of | 2560 and recommend BUY.
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