HDFC Bank reported net profit of Rs3.68 bn, which was up 44% yoy and 5% higher than our estimate. However, the company exceeded our target largely due to treasury gains.
Core operating performance was 7% below our estimate as the bank reported lower other income and higher expenses. Strong NII growth and moderate growth in fee income drove most of the growth in income. We have tweaked our earnings estimates marginally, so too our target price—to Rs1,300 from Rs1,250. The stock trades at 23X PER and 3.7X PBR FY2009.