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HDFC Bank share falls 4% post Q4 earnings; here's what brokerages say

HDFC Bank stock touched an intraday low of Rs 1372.65, down 3.91% on BSE. It opened with a loss of 2.34% at Rs 1,395 against previous close of Rs 1,428 

twitter-logoBusinessToday.In | April 19, 2021 | Updated 15:36 IST
HDFC Bank share falls 4% post Q4 earnings; here's what brokerages said
HDFC Bank share trades higher than 200 day moving averages but lower than 5 day, 20 day, 50 day and 100 day moving averages.

HDFC Bank share fell nearly 4% today after the private sector lender announced its earnings for the quarter ended March2021. HDFC Bank reported a net profit of Rs 8,186.5 crore in Q4, 18.2 per cent higher than the year-ago period. The share has lost 2.3% in last two days. The large cap stock opened with a loss of 2.34% at Rs 1,395 today against previous close of Rs 1,428 on BSE.

The stock touched an intraday low of Rs 1372.65, down 3.91% on BSE.

The share trades higher than 200 day moving averages but lower than 5 day, 20 day, 50 day and 100 day moving averages.  

The stock has gained 53.71% during one year and lost 2.6% since the beginning of this year.

Market cap of the firm fell to Rs 7.71 lakh crore on BSE.

In Q4, net interest income rose 12.6 per cent to Rs 17,120.2 crore driven by a 14% growth in advances and a core net interest margin of 4.2 per cent.

Total credit cost ratio in March quarter last fiscal was at 1.64 per cent as compared to 1.51 per cent in the corresponding quarter of previous fiscal.

Provisions and contingencies for the quarter ended March 31, 2021 stood at Rs 4,693.7 crore as against Rs 3,784.5 crore in the same quarter of the previous fiscal.

For the financial year ended March 31, 2021, the lender reported an 18.5 per cent increase in its net profit at Rs 31,116.53 crore compared to Rs 26,257.32 crore in FY20, according to a regulatory filing.

Here's a look at what brokerages and analysts said after the earnings of India's largest private sector lender.

Motilal Oswal said, "The bank continues to make additional contingent provisions to further strengthen the balance sheet amid the rising covid cases even as asset quality held stable. We expect a 20% PAT CAGR over FY21-FY23E and maintain Buy with target price of Rs 1,800 (3.5x FY23E ABV)."

YES Securities too has retained buy call on HDFC Bank stock. "It is most pertinent to note that bank has maintained core PPOP margins around 3.3%, even in challenging circumstances such as 1) retail slowdown driving increase in corporate share before pandemic and 2) tightening of underwriting post the pandemic. HDFCB is the least cyclical franchise in our coverage, with structural capability to keep growing at 15% plus in the foreseeable future. The core bank (adj. for sub value of Rs 65/share) trades at 2.8x P/ABV and 16x P/E on FY23 basis. Retain high-conviction BUY and 12 month price target of Rs 1,870."

Jyoti Roy, DVP- Equity Strategist at Angel Broking said, "HDFC Bank delivered another solid quarter of earnings growth with GNPA and NNPA at 1.32% as compared to 1.38% last quarter on a pro forma basis. Net NPA for the quarter stood at 0.4% while PCR stood at 70%. At current levels, the stock is trading at P/BV of 2.9xFY23 book which is below historical average. Post the Q4FY21 numbers, we continue to maintain our positive stance on HDFC Bank and it remains one of our top picks in the large cap banking space."

ICICI Securities in a report said, "We revise earnings by 5%/8% for FY22/23E and maintain BUY with a revised target price of Rs 1,818 (valuing the bank at 3.7x FY23E P/ABV). Key risks for the bank are 1) recent technology outage further defers visibility on credit card rollout ban; 2) the second wave of Covid, if prolonged, can weigh on credit cost or growth."

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