HDFC Bank shares are witnessing a rapid rise today. After the December quarter results, the stock rose nearly 2 per cent to Rs 1,500 in early trade. The stock closed at Rs 1467 on Friday. HDFC Bank has reported a profit of Rs 8758 crore in the third quarter, which is 18 per cent higher on an annual basis. The asset quality of the bank has improved. NII has also seen good growth. There has been good growth in profits due to the increase in non-interest income. After the results, most brokerage houses have given a positive opinion about the bank’s stock.
Improvement in asset quality
GNPA / NNPA ratio improved 27bp / 8bp to 0.8% / 0.1% on a quarterly basis. HDFC Bank saw a 15 percent growth in net interest income, with profits rising 18.1 percent year-on-year to Rs 8,758 crore. Treasury gains also contributed to this. Net interest income rose 15.1 percent to Rs 16,317 crore on a quarterly basis.
Good growth in advance
Advance grew at 15.6 percent. Fee income has increased 10 percent on an annual basis. There has been a growth in retail assets. Treasury gain has increased by 64 percent on an annual basis. Other income growth has also been 12 percent on an annual basis. Loan growth was 16 percent. 25.5 per cent growth in corporate loans and 5 per cent growth in retail loans has been seen on an annual basis. Deposits grew by 19 percent year-on-year. The CASA ratio improved to 43 percent.
Opinion on investment
Most brokerage houses have termed the results of HDFC Bank better than expected. In addition to net interest income, loans and deposit growth are encouraging. Loan growth has been observed in both corporate and retail segments. Asset quality has steadily improved. The stock is expected to grow further due to healthy business growth.
Brokerage House Motilal Oswal The company has set a target of Rs 1720, recommending investment in the stock. That is, Friday’s closing price of Rs 1466 can get 17 percent return. The brokerage house has estimated earnings CAGR of 20 per cent for FY22 / FY23.
Brokerage House MK Global Has increased the target to Rs 1850, suggesting an investment in the stock. According to the brokerage house, net interest margin is better. Asset quality has improved. The business outlook is strong.
Brokerage House Jefferies Has set a target of Rs 1800 for the stock Sharekhan Has set a target of Rs 1810 for this. Macquarie Giving a rating of outperforming for the stock, it has set a target of Rs 2005.
(Note: We have given advice here based on the quarterly results of the bank and the report of the brokerage house. Seeing the risk of the market, take the opinion of the experts before investing.)