Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.icicidirect.com/mailimages/ICICIdirect_HDFCBank_Q4FY12.pdf
H i g h e r s e q u e n t i a l C A S A c u s h i o n s m a r g i n s …
Strong NII growth and lower provisioning supported HDFC’s 30% PAT
growth trajectory. NII growth got shored up as NIM witnessed an uptick of
10 bps sequentially to 4.2%. Business growth retained momentum with
20% YoY growth to | 442126 crore. Credit grew 22.2% YoY to | 195420
crore with retail composition jumping to 54.8%. The bank was in expansion
mode during Q4FY12 with 343 branches and 1803 ATMs added. Full impact
of this cost may be seen in forthcoming quarters. Asset quality was stable
with provisions declining 30.8% YoY. We are introducing FY14E financials
with the bank expected to post PAT CAGR of 27.6% CAGR over FY12-14E.
NIM improvement of 10 bps QoQ to 4.2% comes as a positive surprise…
In the current high interest rate scenario, the bank managed to reduce its
CoF by 34 bps as average daily CASA improved sequentially by ~2% to
49.7%. HDFC Bank was the collecting banker for some of the tax free bond
issuances, which caused the weighted average CoF to decline.
Similarly, on the interest income side, yields improved as retail credit
(higher yielding assets), constituted 54.8% of credit. Retail credit increased
by | 6779 crore to | 107126 crore (33.7% YoY growth). On the other hand,
the corporate book (lower yielding book) was shed by | 5662 crore to
| 88294 crore (17.4% YoY growth). The spike in fixed deposit rates
protected the bank from corporate lending from a margin point of view.
NNPA declines 11.5% QoQ, PCR improves 210 bps QoQ to 82.4%…
Asset quality was stable with GNPA declining 1% QoQ to | 2000 crore. The
GNPA and NNPA ratios were stable at 1% and 0.2%, respectively.
Considering sector wise asset quality, the GNPA ratio for agriculture,
industry, services and personal loans stood at 1.27%, 1.36%, 1.54% and
0.4%, respectively. The bank managed to reduce NNPA in absolute terms
by 11.5% QoQ to | 352.3 crore. PCR improved 210 bps QoQ to 82.4%. We
estimate GNPA and NNPA ratio at 1% and 0.2%, respectively, for FY14E.
V a l u a t i o n
High retail exposure and limited exposure to stressed corporates provide
comfort on earnings. The ability to improve NIM in the current high CoF
scenario is commendable on part of the management. PAT is expected to
stay strong at 27.6% CAGR to | 8538 crore over FY12-14E. Return ratios will
remain healthy with RoE expected to be 22.7% in FY14E. We have valued
the bank at 3.3x its FY14E ABV, maintaining TP of | 546 with a HOLD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.icicidirect.com/mailimages/ICICIdirect_HDFCBank_Q4FY12.pdf
H i g h e r s e q u e n t i a l C A S A c u s h i o n s m a r g i n s …
Strong NII growth and lower provisioning supported HDFC’s 30% PAT
growth trajectory. NII growth got shored up as NIM witnessed an uptick of
10 bps sequentially to 4.2%. Business growth retained momentum with
20% YoY growth to | 442126 crore. Credit grew 22.2% YoY to | 195420
crore with retail composition jumping to 54.8%. The bank was in expansion
mode during Q4FY12 with 343 branches and 1803 ATMs added. Full impact
of this cost may be seen in forthcoming quarters. Asset quality was stable
with provisions declining 30.8% YoY. We are introducing FY14E financials
with the bank expected to post PAT CAGR of 27.6% CAGR over FY12-14E.
NIM improvement of 10 bps QoQ to 4.2% comes as a positive surprise…
In the current high interest rate scenario, the bank managed to reduce its
CoF by 34 bps as average daily CASA improved sequentially by ~2% to
49.7%. HDFC Bank was the collecting banker for some of the tax free bond
issuances, which caused the weighted average CoF to decline.
Similarly, on the interest income side, yields improved as retail credit
(higher yielding assets), constituted 54.8% of credit. Retail credit increased
by | 6779 crore to | 107126 crore (33.7% YoY growth). On the other hand,
the corporate book (lower yielding book) was shed by | 5662 crore to
| 88294 crore (17.4% YoY growth). The spike in fixed deposit rates
protected the bank from corporate lending from a margin point of view.
NNPA declines 11.5% QoQ, PCR improves 210 bps QoQ to 82.4%…
Asset quality was stable with GNPA declining 1% QoQ to | 2000 crore. The
GNPA and NNPA ratios were stable at 1% and 0.2%, respectively.
Considering sector wise asset quality, the GNPA ratio for agriculture,
industry, services and personal loans stood at 1.27%, 1.36%, 1.54% and
0.4%, respectively. The bank managed to reduce NNPA in absolute terms
by 11.5% QoQ to | 352.3 crore. PCR improved 210 bps QoQ to 82.4%. We
estimate GNPA and NNPA ratio at 1% and 0.2%, respectively, for FY14E.
V a l u a t i o n
High retail exposure and limited exposure to stressed corporates provide
comfort on earnings. The ability to improve NIM in the current high CoF
scenario is commendable on part of the management. PAT is expected to
stay strong at 27.6% CAGR to | 8538 crore over FY12-14E. Return ratios will
remain healthy with RoE expected to be 22.7% in FY14E. We have valued
the bank at 3.3x its FY14E ABV, maintaining TP of | 546 with a HOLD rating.
No comments:
Post a Comment