Apr 26, 2013, 11.59 AM | Source: Moneycontrol.com
Firstcall Research is bullish on HDFC Bank and has recommended buy rating on the stock with a target price of Rs 751 in its April 24, 2013 research report.
, Firstcall Research |
"HDFC Bank was amongst the first to receive an ‘in principle' approval from the RBI to set up a bank in the private sector. Bank's Capital Adequacy Ratio registered at 16.80 percent as on 31.03.13. The Bank's distribution network was at 3062 branches and 10743 ATMs in 1845 cities as of March 31, 2013. The Bank's total income for the quarter ended March 31, 2013, was Rs. 111275.00 mn as against Rs. 91899.00 mn for the quarter ended March 31, 2012. The Bank's total balance sheet size increased by 18.5 percent from Rs. 4003320 mn as of March 31, 2013, to Rs. 3379090 mn as of March 31, 2012. Total deposits were at Rs. 2962470 mn, an increase of 20.1 percent over March 31, 2012. HDFC Bank Ltd has recommended a dividend of Rs. 5.50 per equity share of Rs. 2/- each (i.e. 275 percent) out of the net profits for the year ended March 31, 2013. During the quarter & year ended March 31, 2013, the Bank has allotted 11353565 & 32730760 shares pursuant to the exercise of stock options. Net Income and PAT of the company are expected to grow at a CAGR of 21 percent and 23 percent over 2012 to 2015E respectively.
The Bank has posted a net profit of Rs. 18898.40 million for the quarter ended March 31, 2013 as compared to Rs. 14530.80 million for the quarter ended March 31, 2012. Revenue for the quarter rose 26.20 percent to Rs. 93239.10 million from Rs. 73880.40 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 7.94 a share during the quarter, registering 74.34 percent a decrease over previous year period.
Outlook and Conclusion:
At the current market price of Rs.689.40, the stock P/E ratio is at 19.23 x FY14E and 16.45 x FY15E respectively.
Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs. 34.26 and Rs.40.07 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 21 percent and 23 percent over 2012 to 2015E respectively.
On the basis of Debt-Equity Ratio, the stock trades at 3.60 x for FY14E and 3.41 x for FY15E.
Price to Book Value of the stock is expected to be at 3.53 x and 2.91 x for FY14E and FY15E respectively.
We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY' in this particular scrip with a target price of Rs 751 for medium to long term investment," says Firstcall Research report.
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