In the initial trade, the HDFC Bank share price reached a 52-week high of Rs 1,715.85; however, it lost all of its gains and was trading at Rs 1,669, down Rs 24.30, or 1.44%, on the BSE. The private lender reported a 21% increase in consolidated net profit at Rs 12,594.5 crore year over year.
Fourth Quarter Results
HDFC Bank increased its consolidated net income by 20.3 percent year on year to Rs 34,552.8 crore during the quarter, compared to Rs 28,733.9 crore in the previous quarter.
In an exchange filing on April 15, HDFC Bank stated that for the quarter ended March 31, 2023, net interest income (NII), or the difference between interest earned and interest expended, increased by 23.7 percent to Rs 23,351 crore from Rs 18,872 crore.
HDFC Bank revealed an in-line quarter with solid development in NII, even as edges stayed stable, while center pre-arrangement working benefit (PPoP) development stayed unassuming. Credit development was driven by supported energy in the retail portion and powerful development in business and provincial banking.
While the restructured book moderated to 31bp of loans, asset quality ratios remained robust. Solid PCR and a contingent provisioning cushion ought to help resource quality. The brokerage firm maintained its earnings estimate and projects a PAT CAGR of less than 19 percent from FY23 to FY25, with a RoA/RoE ratio of 2.0 percent and 17.7 percent in FY25.
With a target price of Rs 1,950 (based on 3.0x Sep’24E ABV), the brokerage reiterated its “buy” rating. The most important monitorables would be the potential improvement in margins and progress on the merger.
The management of the bank anticipates a higher cost-to-income (CI) ratio and stable NIMs in FY24. The consolidation is supposed to finish by July 2023, as indicated by the board.
According to the report, the bank could benefit from the interest rate cycle’s peak and a decrease in incremental system LDR.
