Moneycontrol
May 10, 2017 04:51 PM IST | Source: Moneycontrol.com

Buy HDFC; target of Rs 1850: Axis Direct

Axis Direct is bullish on HDFC has recommended buy rating on the stock with a target price of Rs 1850 in its research report dated May 09, 2017.

Buy HDFC; target of Rs 1850: Axis Direct

Axis Direct's research report on HDFC


HDFC’s Q4FY17 PAT at Rs20 bn (up 32% YoY after adjusting for Q4FY16 one-offs) was in line with our expectation. Stringent cost controls helped set off impact of high-than-expected provisions. AUM growth was decent at 16% YoY; with both retail &non-individual loans contributing equally. NIM improved 15bps QoQ to 4.1% and headline asset quality was stable (GNPA at 79 bps).


Outlook


HDFC enjoys tailwinds from GoI’s push for affordable housing (extended to middle income households) and benign interest rate environment. It has delivered healthy loan growth (16% average over the past 5 years) on an ever-increasing base. Recent inorganic acquisitions in life & general insurance businesses would also start paying dividends in medium term. Maintain BUY with TP of Rs 1,850.


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