A little slow on this one, but Q2 looked good - again. We're still waiting to hear from the likes of ICICI, Yes, and SBI so comparisons will have to wait, but loan growth over 20% and keeping the NIM at 4.2% are pretty strong results.I'm still a little leery of the reduced loan loss provisions, but management talked on the call about specific provisions (those made with specific loans or loan groups in mind) and specific reserves are 82% of gross non-performing assets. In addition there are general provisions made to address the general risk of a growing loan portfolio. According to management these reserves push total coverage to over 200%.This is more reassuring though it is hard to track these numbers through the quarterly reported numbers so I am having to take management's word on this.All in all, another good quarter with HDFC doing what we expect. I'm still watching loan quality, especially as retail lending increases (it was 53% of loans in Q2). The stabilizing of the rupee has helped, as well and the shares look to be near the low end of my estimate of fair value ($38-$41 - though this can change dramatically depending on FX).
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