Sharekhan has given Buy recommendation for HDFC Bank with a target price of Rs. 1973 in its research report issued on Mar 14, 2022

Sharekhan’s research report on HDFC Bank

HDFC Bank over the weekend communicated through the exchanges that RBI has lifted the restrictions imposed on it, pertaining to new initiatives under digital 2.0. This addresses a key overhang on the stock as the bank was unable to continue its role out of new digital initiatives and there on was losing on market share to its competitors. Previously, RBI in December 2020 had barred HDFC Bank to stop all launches of its upcoming digital business-generating activities and sourcing of new credit card customers after repeated outages at its data centre which impacted operations. The curbs were partially lifted in August 2021, where the bank was allowed to issue new credit cards. However, the bar on the digital front continued. Eventually, this has now been removed. HDFC bank has further added that it has drawn plans to meet the evolving digital requirements of customers during the embargo period. The bank added 2.1 lakh new credit cards m-o-m in January 2022 and it has 1.6 crore cards outstanding. The bank has demonstrated a healthy traction in the loan book growth driven by retail book aided by pick-up in the unsecured segments and commercial baking segment. With the removal of the digital embargo, we believe the bank is poised to grow its assets with much strong aggression.


The stock trades at 2.8x/2.4x its FY2023E and FY2024E book value. It has corrected by 20% from the high of Rs. 1,724 which offers a good opportunity at lower levels. Hence, we maintain a Buy with an unchanged price target of Rs. 1,973.

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