Buy HDFC Bank Ltd For Target Rs.1800 - ICICI Direct
![](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2021/07/a74a23068c105e78baef7e7992e27409.jpg)
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Pandemic hits quarter; geared to push recovery ahead
About the stock: HDFC Bank is a leading private sector bank with consistent growth and operational performance over various cycles. The bank has maintained superior return ratios compared to its peers resulting in premium valuations.
* Largest private sector bank with loan book of over | 11 lakh crore
* Consistent performance with +4% NIM and +15% RoE in past many years
Q1FY22 Results: HDFC Bank’s performance was below expectations considering the tough environment.
* Loans were up 14.4% YoY at | 11.4 lakh crore with deposits up 13.2% YoY
* NII up 8.6% YoY, NIM down 10 bps QoQ at 4.1%, C/I down QoQ to 35%
* GNPA accretion higher at 15 bps QoQ to 1.47%, r/s book at 80 bps
* GNPA doubled in HDB at 7.75%; further trend remains in focus
What should investors do?
HDFC Bank’s share price has grown by ~2.5x over the past five years.
* We remain positive and retain our BUY rating on the stock
Target Price and Valuation: We value HDFC Bank at ~3.7x FY23E ABV and | 50 for subsidiaries to arrive at a revised target price of | 1800.
Key triggers for future price performance:
* Strategy to expand segments, geography & digital focus to aid future growth
* Stressed accretion elevated; higher specific provision and contingency buffer of 70 bps provides comfort
* Encouraging demand resolution & superior franchise to aid earnings revival
Alternate Stock Idea:
Apart from HDFC Bank, we also like Axis Bank.
* Strong liabilities franchise, adequate capitalisation and healthy provision buffer to aid business growth as well as earnings trajectory
* BUY with target price of | 900
To Read Complete Report & Disclaimer Click Here
https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
Above views are of the author and not of the website kindly read disclaimer
![](https://portfolio.investmentguruindia.com/uploads/news/Clean Science and Technology.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Somany logo.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Axis Securities Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/startup.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Srinivas Narayanan.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Mongolia.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/nitingadkari37.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/jul03v68_wcHr0zT.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/IT Sector03.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Bharti Airtel Ltd.jpg)