BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
HDFC Bank Q1 reported mixed trends in advances growth. While corporate growth was robust at approximately 38% YoY, retail loan growth declined sequentially. Operating performance remained steady, led by strong net interest income growth and tight control on opex. In contrast, fee income declined sharply due to the economic slowdown. However, higher treasury gains supported other income.
Further, the bank has made contingent provisions of Rs 10 billion (verses Rs 15.5 billion in Q4 FY20, which increased total contingent provisions to Rs 40b. While slippages were higher, healthy provisioning enabled an improvement in coverage ratio. We have fine-tuned our estimates to factor in the current trends and estimate HDFC Bank to deliver 17% earnings compound annual growth rate over FY20-22E.
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