Sharekhan has given Buy recommendation for HDFC Bank with a target price of Rs. 1810 in its research report issued on Jul 16, 2021
Sharekhan’s research report on HDFC Bank
Operational performance was mixed in Q1FY2022.NII growth at 8.6% y-o-y in Q1QFY22 was lowest since Q1FY16 due to slower retail loan growth. NIM slid 10 bps lower q-o-q to 4.1%. PAT met expectations despite higher provisions, but this provides bank adequate cushions going ahead. Asset quality deteriorated q-o-q primarily due to subdued collections given the lockdowns in April-May amid the second wave of COVID-19. Advances rose decently and an improved CASA ratio helped sustain NIM q-o-q. HDB financials earnings contracted 44% y-o-y in 1Q due to the end wave of pandemic. GNPL to 7.75% in 1Q from 3.9% in 4QFY21. Stock currently trades at 3.9x/3.4x its FY2022E/FY2023E ABVPS, it has underperformed the broad BSE Sensex by 5% in the past 12 months, indicating a favourable risk-reward.