HDFC an outperformer, tgt Rs 2406:Prabhudas Lilladher

Prabhudas Lilladher has maintained outperformer rating on HDFC with target price of Rs 2406, in its JUly 17, 2008 report. "HDFC posted 35% growth in its net interest income for Q1FY09 to Rs 6.6billion. Growth was backed by 31% YoY growth in loan book to Rs 773 billion and 4bps improvement in spreads to 2.26%. However, NII growth was slightly below our estimates due to faster rise in deposit costs, up 17.7% YoY and 32.7% QoQ. Treasury income was nil during Q1FY09. Both these factors mainly resulted in reported earnings being lower by 7% at Rs 4.7billion against our estimate of Rs 5.1 billion. At current valuations, HDFC is trading at 3.6x and 3.2x its book value for FY09E and FY10E respectively. We maintain Outperformer rating on the stock with a revised price target of Rs 2,406" according to Prabhudas Lilladher report.