To buy Customized Research reports, please email: or call: 9701063320

Wednesday, 25 October 2017

                                            HDFC BANK LTD - Q2 FY18

Banking Bell-weather HDFC Bank Ltd reported strong  second quarter FY18 with both PAT, NII, other income, deposits and advances all growing in double digits. PAT or Net Profit for the quarter stood at Rs. 41510 Mn compared to Rs. 34553 Mn same period previous year, rising 20% YOY & with quarterly growth of 7%, strongest over the previous two quarters.  Net Interest Income, difference between interest earned and expended was at Rs. 97521 Mn in the current quarter against Rs. 79936 Mn corresponding quarter previous year rising 22% YOY & 4% sequentially. Net Interest Margin indicating core profitability of bank’s operations stood at 4.30% for the current September quarter. Gross NPAs as a percentage of Gross Advances edged up 24 basis points YOY at 1.26%, Net NPAs as a percentage of Net advances also rose 13 basis points at 0.43% in the current Q2 FY18.  One basis point is 0.01%. On sequential basis, GNPA ratio jumped 2 basis points whereas Net NPA ratio declined one basis point. Provisions & contingencies have doubled YOY and stood at Rs. 14762 Mn with sequential decline of 5%. Double digit growth was visible in wholesale and other banking business segment at 27% & 31% respectively YOY. Retail contributing 50% of revenues followed at 9% whereas by Treasury reported 4% growth YOY. CASA ratio galloped 300 BP and stood at 43% in the current quarter. Other income or non interest revenue accounting 15% of the total income of the bank rose 24% YOY and stood at Rs. 36059 Mn in current Q2 FY18 with a sequential jump of 3%. Advances outpaced deposits moving at 22% yearly where as Deposits grew 17%.  Advances & Deposits stood at Rs. 6048669 Mn and Rs. 6893459 Mn in the Q2 FY18.
Cost income ratio of bank stood at 42.60% in the current September FY18 against 45.90% corresponding quarter previous year. HDFC Bank, second largest private sector with market cap of Rs. 4720064 Mn, is an epitome of stability & profitability in the midst of global volatility and domestic uncertainty. With stable asset quality & CASA, rising NII & NIM, growing profitability and CAR of 15.10% (Tier I-13.30%), HDFC bank is one of the most desirable long term bets for retail investors.  Thus we recommend BUY for the stock for medium and long term investment with a target price of Rs. 2225.

The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.

The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.


  1. BANK OF BARODA: Cabinet approved Rs 2.11 lakh crore PSU Banks' recapitalization plan for a two year period.
    Trading Tips