HDFC Bank's Proforma GNPA remained stable at 1.38% vs 1.37% QoQ while NNPA at 0.4%; reported GNPA declined to further 0.81%. However, Proforma Slippages remain at 1.86% vs 2.31% YoY vs 1.98% QoQ. Restructuring under RBI resolution framework stood at 0.5% of advances incl. fewer corporate cases.

Bank reported collection efficiency at 97% in December month (earlier 95% Sept month). Profitability (PBT growth) saw an uptick led by lower provision; PAT remain stable at 18%. NII grew by 15% YoY against a loan growth of 16% YoY. PPoP grew by 17% YoY as cost to income ratio improved (36% vs 38% YoY); fee income grew by 10% YoY vs -3% (Q2FY21).

Commenting on the Q3 earnings review, the broking firm IDBI Capital Markets & Securities said, "As overall economy continues to improve, we believe that HDFCB would see the best revival in growth within the sector."

IDBI Capital re-iterates 'Buy' with a new TP of Rs.1,740 (earlier Rs.1,430) based on P/Bv of 3.6x (earlier 3.1X) FY23E as clarity emerges on impact of Covid -19 on asset quality front.

"HDFC Bank continues to command highest market share amongst private banks. We believe HDFCB to traverse through these tough times and will gain market share led by strong leadership position across segments, large distribution, digital focus and strong capital adequacy. We remain structurally positive on HDFCB given its superior credit underwriting, structurally better NIM and the ability to maintain higher RoA among its peers," it added.

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