KR Choksey has given Buy recommendation for HDFC Bank with a target price of Rs. 1720 in its research report issued on Apr 19, 2021

KR Choksey’s research report on HDFC Bank

PAT grew 18.2% YoY but was 6.5% lower QoQ. The provisions remained elevated. The NIMs fell 11 bps YoY but rose 7 bps QoQ. Advances grew 14% YoY. Retail assets grew 6.7% YoY and wholesale grew 21.7% YoY. Deposit grew 16.3% YoY (5% QoQ) with CASA improving to 46.1%, higher by 311bps QoQ. Term deposits grew 9% YoY. PPoP grew 19.3% YoY driven by improved NII. The GNPA were 1.36% vs a comparable 1.38% last quarter. The credit costs were 1.64% vs 1.25 last quarter and 1.51% last year. CAR was at 18.8%.


We maintain our target of INR 1,720 per share, implying a P/ABV of 3.5x FY23E P/ABV, an upside of 21.8% over the CMP. Accordingly, we upgrade the rating on the shares of HDFC Bank Ltd. to a BUY. We expect this valuation to continue for the bank’s market position and relatively stronger customer segment.