PL Stock Update: HDFCB Q1'24 business update

PL Stock Update: HDFCB Q1’24 business update – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

♦    Loan growth was weak 0.9% QoQ and 15.8% YoY to Rs16.16trn driven.

♦    Retail grew by 4% QoQ and 20% YoY; CRB grew by 2.0% QoQ and 29% YoY. Corporate accretion was 1.0% QoQ and 11.0% YoY.

♦    Relative deposit growth was 1.6% QoQ and 19.2% YoY to Rs19.13trn. While LDR has declined QoQ to 84.4% from 85%.

♦    Retail deposits increased by Rs380bn QoQ and grew 2.5% QoQ and 21.5% YoY.

♦    Wholesale deposits inched up by 2.5% QoQ and 9% YoY

♦    CASA decreased by 2.7% QoQ while retail CASA was up by 2.0% QoQ. CASA ratio declined QoQ to 42.5% from 44.4%.

PL view

♦    Loan growth numbers are lower probably due to focus on the merger. While loan offtake seems to be lower to the system, retail growth was strong at 4% QoQ which is a positive and share of retail is expected to improve this quarter.

♦    Our sense is standalone NIM could be better in Q1FY24 compared to Q4’23 since the base has been calibrated.

♦    Deposit accretion has been in-line with credit offtake although CASA declined of 2.7% QoQ seems to seasonal in nature

♦    At CMP stock is trading at 2.5x core Mar'25 ABV. We have a BUY rating with TP of Rs1925 (3x Mar’25 core ABV).