PL Stock Update - HDFC Bank Q1FY24 - Core earnings miss by 3.7% led by higher opex

PL Stock Update – HDFC Bank Q1FY24 – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

HDFC Bank Q1FY24 - Core earnings miss by 3.7% led by higher opex

--NII was largely in-line at Rs236bn (PLe Rs235bn) growing by 21.1% YoY

--NIM too came in as expected at 4.34% (PLe 4.33%); Yield on loans was 10.1% (PLe 9.9%) whereas cost of funds was 5.12% (PLe: 4.85%).

--Credit growth was 15.8% YoY driven by CRB (+29.1%) & retail (+20.1%) whereas corporate loan growth was at 11.6%.

--Deposits grew 20.8% YoY that was largely driven by higher TD growth of 26.4% YoY, while CASA ratio stood at 42.5% (vs 44.4% in Q4’23).

--Other income was a beat at Rs92bn (PLe Rs87bn) due to higher treasury income of Rs5.5bn

--Opex was a miss at Rs140.6bn (PLe Rs137bn) led by both employee costs and other expenses.

--PPoP was inline at Rs187.7bn (PLe Rs187.3bn) and while core PPoP at Rs182.2bn was 2.2% below PLe.

--GNPA/NNPA was better though deteriorated by 5/3bps QoQ to 1.17%/0.3% while PCR dipped slightly QoQ to 74.9% from 75.8%.

--Provisions were largely in-line at Rs28.6bn (PLe Rs26bn)

--PAT came in at Rs119.5bn (PLe Rs120.5bn) while core PAT at Rs115.4bn was a miss to PLe by 3.7%.

--On a consol basis, stock trades at P/core ABV of 2.4x FY25 core ABV.