HDFC Bank Q4 Review - Showing Resilience Despite Macro Challenges: Prabhudas Lilladher
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Prabhudas Lilladher Report
HDFC Bank Ltd.’s earnings of Rs 81.8 billion saw a 6% miss from our estimates (PLe: Rs 86.8 billion) on higher contingency provisions of Rs 13 billion (Rs 8 billion for asset quality) and slightly slower NII. Although, PPOP saw a 5% beat led by good other income (treasury/recovery from w. off) and controlled opex growth.
Asset quality was steady sequentially, although it added Rs 8 billion to Covid contingency provisions (non PCR related) to take it to Rs 58 billion or 60 bps of loans.
High level financial indicators like cash flow improvements, increase in spends and increased customer additions continue to show robustness. While, certain deterrents have occurred like higher cheque bounces and few states pulling down collections.
HDFC Bank remains a strong franchise with solid cross cycle asset quality and superior return ratios
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