HDFC Bank- Steady performance :Emkay,

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HDFC Bank

Steady performance

HOLD

CMP: Rs 491                                       Target Price: Rs 510

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n     HDFC Bank’s Q2FY12 results largely inline with NII at Rs29.4bn and net profit at Rs12bn. Reported NIM declined 10bps qoq due to higher interest cost

n     Loan portfolio expanded 7.4% qoq aided by 11% sequential growth in retail loan portfolio. Term deposits were up 13% qoq and comprised 71% of the incremental total deposits

n     Asset quality remains well within comfort zone. Annualised slippage rate still low at 0.8%. Restructured loan portfolio stands at 0.4% of gross advances

n     Remain positive given superior operating matrix and stable asset quality. However valuations of 3.9x/3.2x FY12E/ FY13E ABV leave limited room for upside. HOLD with TP of Rs510