HDFC Bank Q2 Results Review - Steadily Moving Towards Improved Growth, Profitability: Motilal Oswal

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..Motilal Oswal Report.HDFC Bank Ltd. reported steady performance in Q2 FY25, with net earnings of Rs 168.2 billion (~3% beat).Net interest margins declined 1 bp QoQ to 3.46%, while the credit/deposit ratio declined sharply by ~4% QoQ to 99.8%.Provisions were 5% higher than our estimate at Rs 27 billion. The bank utilized Rs 7 billion of contingent provisions pursuant to the reversal of AIF provisions. HDFC Bank is holding total provisions (floating and contingent) of Rs 262 billion.Gross non-performing asset ratio increased 3 bp QoQ to 1.36%, while provision coverage ratio remained stable at 71.2%. Fresh slippages stood at Rs 78 billion (1.3% of loans).Given that the bank is focusing on bringing C/D to a normalized level, we trim our loan growth estimates to 7%/10% for FY25/FY26. Thus, we estimate C/D to improve to 97.1%/92.2% in FY25/FY26. We estimate HDFC Bank to report gradual recovery in loan growth over FY25- 27E with earnings growth accelerating faster. We thus estimate HDFC Bank to deliver FY26E RoA/RoE of 1.8%/14.6%. We reiterate our Buy rating with a target price of Rs 2,050 (2.4 times Sep’26E adjusted book value plus Rs 295 for subs)..Click on the attachment to read the full report:.HDFC Bank Q2 Results: Net Profit Rises 5% Led by NII; Asset Quality Worsens.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 Q2 Results Review - Steadily Moving Towards Improved Growth, Profitability: Motilal Oswal

The brokerage reiterate its 'Buy' rating on the stock with a target price of Rs 2,050.

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HDFC Bank Q2 Results Review - Steadily Moving Towards Improved Growth, Profitability: Motilal Oswal

The brokerage reiterate its 'Buy' rating on the stock with a target price of Rs 2,050.

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