HDFC Bank, which reported its earnings on Friday, has been downgraded by Elara Capital and IDBI Capital.
While Elara said the current valuations of the stock have captured all potential upside, IDBI Capital said the stable performance of the bank has already been priced in.
Ealra has lowered the bank to sell and IDBI Capital to hold.
Elara noted that the retail business is driving the bank's growth.
"The increase in retail exposure has also enabled the bank to expand asset yields by 115 bps YoY and 37 bps QoQ to offset increases in cost of funds from declining current account, savings account (CASA) share. This, along with higher investment yields (up 17 bps YoY and 23bps QoQ), have taken NIMs up by 10 bps to 4.3 percent," Elara said.
Both the brokerages have raised concerns of a fall in current account, savings account (CASA) ratio.
"CASA ratio fell from 48.4 percent to 46 percent in Q1FY13. CASA balance grew 14 percent year on year while term deposits grew 29 percent year on year in Q1FY13 . Apart from the shift from savings account to term deposit, the bank witnessed higher remittances from NRI depositors owing to attractive term deposit rates, which led to higher growth in term deposits," IDBI Capital said in a post earnings research report.
Both the brokerages, however, expects the bank to continue reporting stable earnings growth and assert quality.
"We like HDFC Bank for its highly profitable operating model - that efficiently prices in retail credit risk - and makes it work," Elara noted.