Emkay Global Financial has given Buy recommendation for HDFC Bank with a target price of Rs. 1850 in its research report issued on Jul 18, 2021

Emkay Global Financial’s report on HDFC Bank

HDFCB reported a miss on PAT at Rs77bn (up 16% yoy) vs. est. of Rs80bn, as higher NPA formation (GNPA up 15bps qoq to 1.5%) weighed on margins/provisions, partly offset by higher forex income. Among the subsidiaries, HDFC Securities reported strong profitability, reflecting the buoyancy in the market, while HDB Financial Services saw asset-quality pressure.

Outlook

We retain Buy with a TP of Rs1,850 (valuing core bank at 3.5x Jun’23E ABV and subs at Rs65/share) given its proven track record in managing asset quality across cycles and delivering superior return ratios.

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