Prabhudas Lilladher has given Buy recommendation for HDFC with a target price of Rs. 2900 in its research report issued on May 03, 2022
Prabhudas Lilladher’s research report on HDFC
HDFC reported a good quarter with all core metrics beating estimates. AuM growth was higher at 14% YoY mainly driven by individual loans while NII and margins too were ahead of projections. Core PPoP was ahead by 5.1% while due to softer provisions, PAT was a beat by 12%. FY22 core PAT at Rs104.5bn (+26.4% YoY). Management indicated that home loan demand remains strong while construction finance could see an uptick. Certain aspects of the merger were clarified i.e. HDFC Ltd’s non-individual loans, borrowings and deposits would form part of the merged balance sheet.
We cut FY23/24E earnings by average 8% led by lower NII also trimming our core FY24 ABV multiple from 3.3x to 2.7x. Revise SoTP from Rs3,228 to Rs2,900 but maintain BUY.