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Last Updated : Feb 11, 2019 02:39 PM IST | Source: Moneycontrol.com

Buy HDFC Bank, target Rs 2420: Anand Rathi

We expect HDFC Bank to be a major gainer of the current crisis in the NBFC space as it has best-in-class liability franchises along with superior customer outreach across business segments.

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Anand Rathi

HDFC Bank is an Indian banking and financial services company headquartered in Mumbai, Maharashtra.

The Bank's total income for the quarter ended December 31, 2018 came in at Rs 30,811.3 crore grew by 26% from Rs. 24,450.4 crore for the quarter ended December 31, 2017. Net revenues (net interest income plus other income) increased by 23.4% to Rs. 17,497.8 crore for the quarter ended December 31, 2018 from Rs. 14,183.5 crore in the corresponding quarter of the previous year.

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.

The 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% in Q2FY19.

HDFC Bank has raised Rs 240 billion of fresh equity in H1FY19, which will support its loan growth in the coming years.

Further, we expect HDFC Bank to be a major gainer of the current crisis in the NBFC space as it has best-in-class liability franchises along with superior customer outreach across business segments.

Backed by the robust underwriting skills & prudence and the consistent track record of growth and profitability, HDFC Bank Limited is our top pick amongst the private sector banks.

At CMP the stock is trading at 3.8x FY19E book value and 3.1x FY20E book value. We recommend a buy on the stock with a target price of Rs 2,420 per share.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​
First Published on Feb 11, 2019 02:39 pm
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