HDFC Bank Q4FY11 Result Update; Slippage rate lowest since FY05; HOLD; Target: Rs 2,530 :Emkay

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HDFC Bank

Slippage rate lowest since FY05

HOLD

CMP: Rs 2,052                                       Target Price: Rs 2,530

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n     HDFC bank results inline with expectations with NII at Rs28.4bn (up 20.8% yoy) and Net profit at Rs11.1bn (up 33.2% yoy)

n     Other positive highlights of the quarter: (1) CASA maintained at 51% (52% in Q4FY10); (2) fee income growth of 7.6% qoq and (3) Slippage rate at <1% for FY11

n     Slippage rate for FY11 at 0.9%, lowest since FY05. Asset quality remained robust with gross and net NPAs down by 5% and 10% qoq respectively with PCR of 82.5%

n     Stability in parameters like NIMs, NII and asset quality as expected. Rolling over valuations to FY13E with strong earnings visibility. Maintain HOLD rating with TP of Rs2,530