Prabhudas Lilladher has given Buy recommendation for HDFC Bank with a target price of Rs. 1800 in its research report issued on Oct 16, 2022

Prabhudas Lilladher’s research report on HDFC Bank

HDFCB saw a good quarter with core earnings beating estimates by ~5% led by stronger NII and other income (excl. treasury) while asset quality was better. NIM was higher by 9bps due to superior yields driven by faster asset repricing, which is expected to outpace that of liabilities, suggesting that NIM would improve in near term. Retail wholesale mix remained stable QoQ at 43:57 owing to stronger growth in corporate. Targeted retail contribution is 55% however the bank would also focus on wholesale if it is RoA accretive. As per its strategy, deposit flow in H1FY23 was largely led by TD (+13% YTD). The bank clarified that it would not resort to aggressive pricing in deposits. We upgrade FY23 earnings by 6% mainly led by higher NIM/NII while there is no material change in FY24/25E PAT.


We remain positive on HDFCB though near term focus would remain on merger. Valuation is undemanding at 2.3x Sep’24 core ABV. We maintain multiple at 3.0x and TP at Rs1,800. Retain BUY.

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