** Net interest income +14% yoy (+1% qoq) to Rs26.1bn – largely in line with estimates – calculated NIMs contracted by about 10bp qoq
** Core fee income surprised negatively as it came in at just about Rs22mn vs Rs377mn in Q1FY18 and Rs622mn in Q2FY17
** Net operating income +13% yoy (+20% qoq) to Rs32.27bn
** Opex +10% yoy (-11% qoq)
** PPOP +13% yoy (+23% qoq) to Rs30.02bn – Core PPOP (ex-trading gains and dividend income) grew 11% yoy (flat qoq)
** Provisions at Rs950mn (flat yoy)
** Tax rate came in at 28% vs 30% expected
** PAT +15% yoy (+35% qoq) to Rs21.0bn – 5% above estimates on lower tax outgo
** Asset quality remained largely stable qoq
** AUMs grew 18% yoy to Rs3.68trillion / Individual loans (ex-sell down) grew 15% yoy to Rs2.23trillion / Corporate loans grew 23% yoy to Rs1.00trillion
The stock trades at 3x FY19E PBV (adjusting for the subsidiaries valuations). We currently have a HOLD rating on the stock with a target price of Rs1,670.
The company is in the process of selling its stake in HDFC Life Insurance Company. We would put out a detailed note post factoring in the IPO details and management interaction.