About the Company:
HDFC Bank is the largest private sector bank in Indian banking system. The bank was among the first to receive approval from the Reserve Bank of India (RBI) to set up a private sector bank in 1994. The bank has a large network that comprise of 5,345 branches and 14,533 ATMs spread around the country.
India’s largest private bank has declared the results for the fourth quarter of financial year ending March 2020.
- Net Interest Income: NII is the difference between interest earned and interest expended that is the key factor for bank’s financial health status, which is increased 1.90% QoQ while on YoY basis, there is an increase of 13.37% growth in interest expended is grown more than interest earned.
- Net Profit After Tax: On QoQ basis, the bank has posted 4.74% down PAT while on YoY basis, there is an increase of 15.63%.
- Provisions and Contingencies: Bank's provisions and contingencies are landed to Rs 421,650 Lakhs are increased by 21.4% QoQ and sharp increase in 104.34% YoY.
- Net NPA:Net NPA ratios are fell by 25% QoQ and 7.69% YoY.
- Dividend Payout:The Board of Directors has not recommended any dividend due to ongoing lockdown.
As per LokeshSethia, SEBI Registered Research Analyst, despite the ongoing lockdown and suspended economic acivities the bank has posted a decent increase in NII numbers. Net profits of the bank have been narrowed from corresponding quarter a year ago. Asset quality is satisfactory for potential investors. Provisions of the bank expand more than double. However, the commentary from management is neutral and any major cut in NII earnings has been been communicated. We recommend it to “BUY” for the target of Rs. 1,200 per share for long term horizon.