Buy HDFC Bank, target price Rs 1,850: Motilal Oswal Financial Services
HDFC Bank Ltd. with a target price of Rs 1,850. The current market price of HDFC Bank Ltd. is Rs 1,630.
HDFC Bank Ltd., incorporated in the year 1994, is a banking company (having a market cap of Rs 1241721.64 Crore).
HDFC Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2024.
Investment Rationale
HDFC Bank (HDFCB)’s Annual Report emphasizes the institution's commitment to achieving sustainable growth over the medium term as it continues to invest in strengthening both its physical infrastructure and digital prowess.
While the near-term growth is likely to remain soft due to constraints on the CD ratio, the increased threshold on loan pricing, which enables improved asset mix and gradual retirement of high-cost borrowings, will nevertheless fuel margin recovery.
While slower loan growth than peers may remain an overhang on the nearterm stock performance, we believe that HDFCB is structurally well poised to deliver steady growth and profitability in the medium to long term. We estimate HDFCB to deliver an FY26E RoA/RoE of 1.86%/14.9%. We reiterate our BUY rating on the stock with a TP of INR1,850 (premised on 2.3x FY26E ABV +INR256 for subsidiaries).
Financials The Bank has reported Standalone Non Performing Assets (Gross NPAs) at .00 % of total assets and Standalone Net Non Performing Assets (Net NPAs) at .00% of total assets for the quarter ending
