Anand Rathi
HDFC Bank is an Indian banking and financial services company headquartered in Mumbai, Maharashtra and has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is India’s largest private sector lender by assets.
HDFC Bank provides a number of products and services including wholesale banking, retail banking, treasury, auto loans, two wheeler loans, personal loans, loans against property, consumer durable loan, lifestyle loan and credit cards.
HDFC Bank reported steady Q2FY19 operational performance. NIM expanded 10 bps QoQ and was flat YoY at 4.3 percent. Core fee income growth at 26 percent YoY continued to remain strong deriving strength from retail fees including cards, third-party insurance, other retail and cash management.
Bank has continued to gain market share in key businesses led by digital sourcing and deeper penetration improving product delivery and cost control which has led the bank to reach historic low C/I of 39.9 percent in Q2FY19.
At CMP the stock is trading at 3.8x FY19E book value and 3.1x FY20E book value. We recommend buy on the stock with a target price of Rs 2,420 per share.
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