{"id":90,"date":"2019-08-05T12:00:50","date_gmt":"2019-08-05T12:00:50","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=90"},"modified":"2019-10-03T11:42:42","modified_gmt":"2019-10-03T11:42:42","slug":"hdfc-bank-hdfcbank-in-stable-performance-but-higher-provisions-are-worrisome","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2019\/08\/05\/hdfc-bank-hdfcbank-in-stable-performance-but-higher-provisions-are-worrisome\/","title":{"rendered":"HDFC Bank (HDFCBANK IN): Stable performance but higher provisions are worrisome"},"content":{"rendered":"\n<p><em>Dated: 22nd July 2019<\/em><\/p>\n\n\n\n<p>1QFY20\nResults<\/p>\n\n\n\n<ul><li>Net\nInterest Income (NII) increased 23% YoY to Rs 1,32,943 mn. The NII margins\nimproved by 21 bps YoY to 4.4%.<\/li><li>Operating\nProfit before Provisions and Contingencies (PPOP) increased by 29% YoY to Rs 1,11,472\nmn. The provisions other than tax increased 60% YoY to Rs 26,137 mn which\nincluded specific loan loss provisions of Rs 24,135 mn (+69% YoY).<\/li><li>Reported\nPAT grew by 21% YoY to Rs 55,682 mn. <\/li><li>The\nadvances grew by 17% YoY to Rs 82,97,298 mn driven by 20% YoY growth in the\ncorporate &amp; other loans to Rs 38,16,757 mn. The retail loans increased by 15%\nYoY to Rs 44,80,541 mn. The domestic loan mix between retail: wholesale stood\nat 54:46. <\/li><li>The\nasset quality as of 30<sup>th<\/sup> June 2019 deteriorated with GNPAs at 1.4%\n(v\/s 1.36% as of 31<sup>st<\/sup> March 2019) and NNPAs at 0.43% (v\/s 0.39% as\nof 31<sup>st<\/sup> March 2019). <\/li><li>HDFC\nBank reported 18% YoY growth in deposits with 13% YoY growth in CASA to Rs 37,90,010\nmn and 23% YoY growth in term deposits to Rs 57,55,530 mn.<\/li><\/ul>\n\n\n\n<p>Management\nCommentary<\/p>\n\n\n\n<ul><li>The Capital Adequacy ratio as of 30<sup>th<\/sup> June 2019 stood at ~16.9%; as against the regulatory requirement of ~11%.<\/li><li>Total provisions (comprising specific provisions, general provisions and floating provisions) were ~115% of the gross NPAs as of 30<sup>th<\/sup> June 2019 v\/s 117% as of 31st March 2019. The Bank held floating provisions of Rs 14,510 mn as of 30th June 2019.<\/li><li>GNPAs ex-Agri stood at 1.17% as of 30<sup>th<\/sup> June 2019 v\/s 1.09% as of 30<sup>th<\/sup> June 2018.<\/li><li>The Board of Directors has declared a special interim dividend of Rs 5 per equity share of Rs 2 to commemorate 25 years of the Bank&#8217;s operations.<\/li><\/ul>\n\n\n\n<p>Consensus Estimate (Source: market screener website)<\/p>\n\n\n\n<ul><li>The closing price of HDFC Bank is Rs 2,303\/- on 22-Jul-19. It traded at 3.5x \/ 3.1x the consensus book value for FY20E \/21E of Rs 650\/ 751 respectively. <\/li><li>Consensus target price of Rs 2,717\/- implies a P\/B of 3.6 x on the FY21E book value of Rs 751\/-.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img src=\"http:\/\/www.assetmultiplier.co.in\/blog\/wp-content\/uploads\/2019\/08\/image.png\" alt=\"\" class=\"wp-image-91\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Dated: 22nd July 2019 1QFY20 Results Net Interest Income (NII) increased 23% YoY to Rs 1,32,943 mn. The NII margins improved by 21 bps YoY to 4.4%. Operating Profit before Provisions and Contingencies (PPOP) increased by 29% YoY to Rs 1,11,472 mn. The provisions other than tax increased 60% YoY to Rs 26,137 mn which [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4,5],"tags":[],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/90"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=90"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/90\/revisions"}],"predecessor-version":[{"id":92,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/90\/revisions\/92"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=90"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=90"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=90"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}