Buy HDFC Bank; target of Rs 1700: ICICI Direct
ICICI Direct is bullish on HDFC Bank has recommended buy rating on the stock with a target price of Rs 1700 in its research report dated April 18, 2021.
April 20, 2021 / 02:44 PM IST
ICICI Direct's research report on HDFC Bank
HDFC Bank’s performance was stable on various parameters like business growth, asset quality and profitability. Business growth continued to show improvement for past three quarters as advances were up 4.7% QoQ, 14% YoY to Rs 1132837 crore. Loan growth was led by wholesale book, which was up 27.1% YoY while retail book increased 6.7% YoY. Within the retail book auto and home loans have shown a sequential pickup while credit card business trajectory has shown a decline due to RBI’s curb on sourcing of new customers. Deposit accretion was healthy at 16.3% YoY and 5% QoQ increase to Rs 1335060 crore. CASA deposits reported even stronger growth of 27% YoY. As a result, the CASA ratio increased from 43% in the previous quarter and 42.2% in previous year to 46.1% in Q4FY21.
We broadly maintain our earnings estimate and maintain our BUY rating with an unchanged target price of Rs 1700/share, valuing the core bank at ~3.7x FY23E ABV and adding Rs 50 in lieu of subsidiaries.
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