HDFC Bank share remains untouched by Q1
Shares of private lender with the largest market cap of Rs. 2.8 lakh crore are trading flat at Rs. 1,115 after the bank announced 6% QoQ growth in net interest income to Rs. 6.389 crore but net profit contracted by 4% sequentially to Rs. 2,696 crore. While the share slipped to day’s low of Rs. 1,102, with high price this Tuesday being 1,128 on NSE, it recouped to the current level of 1,115. 1100 PE and 1140 CE options on the stock have witnessed heightened activity since morning.
While net interest margin fir quarter ended 30th June 2015 was maintained at 4.3%, other income slipped 4% QoQ to Rs. 2.461 crore while provisions shot up by 26% sequentially to Rs. 728 crore. Asset quality was more-or-less maintained with gross NPAs of 0.95% (0.93% as of 31-3-15) and net NPAs of 0.27% (0.25% as of 31-3-15). With first quarter return on assets (RoA) of 0.5%, the annual run-rate is same maintained at FY15’s 2%.
At current BVPS of Rs. 259, share is trading at PBV multiple of 4.3x, which is off the historic highs of 5x, but near other private lenders like Kotak and Indusind Bank. HDFC Bank’s PE multiple, based on expected standalone EPS of Rs. 43.50 for FY16, is 25 times.