[wealthdesk shortname="HDFC Bank" isinid="INE040A01034" bseid="500180" nseid="HDFCBANK" sector="Banks - Private Sector" exchange="nse"] Most brokerages tracking HDFC Bank have maintained their estimates on India's largest private lender after the bank's December quarter results were a beat on expectations.

BofA Securities has maintained its buy rating on the stock with a price target of Rs 2,000. The brokerage said that the bank's branch expansion is on the fast track in the near term and that the catch up in Net Interest Margin will be gradual.

HDFC Bank's net interest income or core income grew at its best pace in 14 quarters during the December period.

HDFC Bank reported a Net Interest Income of Rs 22,987 crore for the December quarter, up 25 percent compared to Rs 18,443 crore during the same period last year.

Net Interest Income of the bank was also higher than the <em>CNBC-TV18</em> poll of Rs 22,307 crore.
<table width="462">
<tbody>
<tr>
<td width="229"><strong>Quarter</strong></td>
<td width="110"><strong>NII (Rs Crore)</strong></td>
<td width="123"><strong>Change (YoY)</strong></td>
</tr>
<tr>
<td><strong>Q3 FY22</strong></td>
<td>18,443</td>
<td>13%</td>
</tr>
<tr>
<td><strong>Q4 FY22</strong></td>
<td>18,873</td>
<td>10.20%</td>
</tr>
<tr>
<td><strong>Q1 FY23</strong></td>
<td>19,481</td>
<td>14.50%</td>
</tr>
<tr>
<td><strong>Q2 FY23</strong></td>
<td>21,021</td>
<td>18.90%</td>
</tr>
<tr>
<td><strong>Q3 FY23</strong></td>
<td>22,307</td>
<td>25%</td>
</tr>
</tbody>
</table>
Net Interest Margin at 4.3 percent was also the highest in 10 quarters.

HDFC Bank reported a net profit of Rs 12,259.5 crore, higher than the expectations of Rs 12,106 crore. The bottomline grew 19 percent compared to the same period last year.

Bernstein has also maintained its outperform rating with a price target of Rs 2,200. It attributed the earnings growth to a healthy credit growth. Benign asset quality trends and a significant sequential improvement in non-interest income helped offset the continued high opex growth, according to the brokerage.

Asset quality for the bank remained stable. Gross Non-performing assets (NPA) for the quarter stood at 1.23 percent, which was the same in the September quarter, while net NPA also remained flat at 0.33 percent.

ICICI Securities had expected gross and net NPA for the quarter to be 1.21 percent and 0.32 percent respectively.
<table width="462">
<tbody>
<tr>
<td width="229"><strong>Quarter</strong></td>
<td width="110"><strong>Gross NPA</strong></td>
<td width="123"><strong>Net NPA</strong></td>
</tr>
<tr>
<td><strong>Q3 FY22</strong></td>
<td>1.26%</td>
<td>0.37%</td>
</tr>
<tr>
<td><strong>Q4 FY22</strong></td>
<td>1.17%</td>
<td>0.32%</td>
</tr>
<tr>
<td><strong>Q1 FY23</strong></td>
<td>1.28%</td>
<td>0.35%</td>
</tr>
<tr>
<td><strong>Q2 FY23</strong></td>
<td>1.23%</td>
<td>0.33%</td>
</tr>
<tr>
<td><strong>Q3 FY23</strong></td>
<td>1.23%</td>
<td>0.33%</td>
</tr>
</tbody>
</table>
HDFC Bank's merger with HDFC continues to be a near-term headwind as deposit mobilisation is an evolving challenge, according to Kotak Institutional Equities. However, the brokerage has maintained its buy rating on the stock with a price target of Rs 1,800.

Provisions for the bank stood at Rs 2,806 crore and were down 6.2 percent compared to last year. When compared to the September quarter, provisions declined 13.4 percent. The provision figure was also the lowest in 13 quarters.

In its quarterly business update released earlier this month, HDFC Bank reported a deposit growth of close to 20 percent year-on-year while advances also grew by a similar quantum. However, Loan growth, on a year-on-year basis was the weakest in four quarters and the weakest in six, when compared sequentially.

CASA Ratio for the bank had declined to an eight-quarter low of 44 percent, compared to 45.4 percent from the September quarter.

The bank's cost-to-income ratio was the highest in 15 quarters as the lender continued its branch expansion. The lender added 684 branches sequentially, taking the total branch count to 7,183.

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Shares of HDFC Bank have remained flat over the last 12 months, gaining only 3.6 percent.

<strong>Also Read: <a href="https://www.cnbctv18.com/finance/eight-bfsi-leaders-terms-likely-to-conclude-in-2023-15654331.htm">Eight banking and financial services leaders' terms likely to conclude in 2023</a></strong>

HDFC Bank Q3 Result: Most brokerages maintain estimates after strongest NII growth in 14 quarters

HDFC Bank reported a net profit of Rs 12,259.5 crore, higher than the expectations of Rs 12,106 crore.

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HDFC Bank Q3 Result: Most brokerages maintain estimates after strongest NII growth in 14 quarters

By Abhishek Kothari Jan 16, 2023 11:05:31 AM IST (Updated)

HDFC Bank's Net Interest Margin at 4.3 percent was also the highest in 10 quarters.

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HDFC Bank Q3 Result: Most brokerages maintain estimates after strongest NII growth in 14 quarters

By Abhishek Kothari Jan 16, 2023 11:05:31 AM IST (Updated)

HDFC Bank's Net Interest Margin at 4.3 percent was also the highest in 10 quarters.

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