HDFC Bank Q1 Results Review - Slower Loan Growth On The Anvil: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Dolat Capital Report.HDFC Bank Ltd.'s results were in-line with slightly higher net interest margin (+7 bps QoQ) and low credit costs aiding profit before tax beat of 8%. PAT was however in-line with normalized tax rate at 24% and reported return on asset at 1.9%.Management alluded bringing down loan-to-deposit ratios much faster than anticipated earlier, while also acknowledging that deposit growth has fallen short of bank’s expectations. We build in deposit growth at 18% YoY (17% growth for merged entity in FY24) and lower loan growth to 12% YoY (14% earlier) over FY25/26E. NIM improvement seen in Q1 is unlikely to sustain as LDR moderates.Consequently, earnings have been revised lower by 7-9%. Given the LDR constraint, growth may remain lower than large private peers for longer, limiting valuations for the bank. We consequently revise our rating to ‘Accumulate’ from Buy with target price of Rs 1800 (Rs 2000 earlier). We value standalone bank at 2.3 times FY26E price-to-book value (2.5x earlier) and add value of subsidiaries. RoAs at 1.8% are settling below large private peers (>2%). .Click on the attachment to read the full report:.HDFC Bank Q1 Results: Net Profit Drops 2% QoQ.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HDFC Bank Q1 Results Review - Slower Loan Growth On The Anvil: Dolat Capital

Given the loan-to-deposit ratio constraint, growth may remain lower than large private peers for longer, limiting valuations for the bank, says the brokerage.

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HDFC Bank Q1 Results Review - Slower Loan Growth On The Anvil: Dolat Capital

Given the loan-to-deposit ratio constraint, growth may remain lower than large private peers for longer, limiting valuations for the bank, says the brokerage.

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