Choice Equity Broking has given Buy recommendation for HDFC Bank with a target price of Rs. 1960 in its research report issued on Apr 18, 2022

Choice Equity Broking’s report on HDFC Bank

HDFC Bank (HDFCB) reported a strong growth in profitability at 22.8% YoY in Q4FY22 on the back of sharp reduction in provisioning cost led by decline in slippages. Though NIM declined 10 bps sequentially to 4.2% as NII growth reduced to 3-quarter low of 10.2% YoY amidst rising exposure to low yielding better rated corporates. Meanwhile fee income rebounded sharply from last quarter blow growing 10.9% YoY led by strong retail fee due to robust assets growth. Slippages rate declined to 1.3% (v/s 1.6% in Q3FY22). Led by sharp decline in slippages, GNPA reduced by 9bps QoQ to 1.17% in Q4FY22. Net restructured book (NRA) was 114 bps of book at Rs157 bn (declined from 1.4% in the previous quarter). Mgmt expects slippages from NRA book to remain within manageable range with possible impact of 10-20 bps on NPAs.

Outlook

We maintain ‘Buy’ rating on stock with target price of Rs1,960 valuing standalone business at Rs1,890 (five year avg. IY forward P/ABV 3.4xFY24E) + value of subsidiaries of Rs70 (after 20% holding discount).

More Info

At 17:30 HDFC Bank was quoting at Rs 1,395.35, down Rs 69.50, or 4.74 percent.

It has touched an intraday high of Rs 1,440.00 and an intraday low of Rs 1,390.10.

It was trading with volumes of 493,756 shares, compared to its thirty day average of 467,630 shares, an increase of 5.59 percent.

In the previous trading session, the share closed down 1.90 percent or Rs 28.40 at Rs 1,464.85.

The share touched its 52-week high Rs 1,724.30 and 52-week low Rs 1,292.00 on 18 October, 2021 and 08 March, 2022, respectively.

Currently, it is trading 19.08 percent below its 52-week high and 8 percent above its 52-week low.

Market capitalisation stands at Rs 773,797.06 crore.

Leave a Reply

Your email address will not be published.