HDFC Bank stock call: 'Buy' from Citi with 44% upside on strong franchise; Check target price

So far this year, the stock of India's biggest private sector lender dropped over 17 percent, as against 0.6 percent rise in the benchmark Sensex

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Global brokerage firm Citi has shared a 'buy' rating on HDFC Bank with a target price of Rs 2,050 per share, implying an upside of over 44 percent from last close of Rs 1,417. Citi analysts are betting on lender's robust and sustainable franchise, which is poised to fuel a profitable growth in the future.

So far this year, the stock of India's biggest private sector lender lost over 17 percent, as against a 0.6 percent rise in the benchmark Sensex.

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Analysts at Citi said that HDFC Bank is aiming to maintain healthy incremental liquidity deposit ratio (LDR) and liquidity coverage ratio (LCR). “To offset increased funding costs, the company plans to adjust lending rates accordingly. It aims to maintain net interest margin (NIM) and return on assets (RoA) within the targeted range," the brokerage firm said.

The recent developments at Paytm have also bolstered the company's optimism about potential opportunities, said analysts. HDFC Bank can leverage the group's capabilities to increase its share in third-party distribution, they said.

Earlier, Paytm partnered with Axis Bank for settlement of merchant payments after the Reserve Bank of India (RBI) extended deadline to halt operations for Paytm Payments Bank account holders, both customers and merchants, move their assets and look for alternative banks till March 15.

Also read: HDFC Bank merger catalyzed loan growth, need to raise funds to keep pace: MD Jagdishan

Apart from that, HDB Financial Services remains on track to meet its listing timelines as planned, analysts at Citi added.

Analysts at Morgan Stanley recently shared an 'overweight' rating on HDFC Bank with a target price of Rs 2,110 per share. The bullish call came after the management said that it recorded stable and healthy double-digit year-on-year (YoY) growth in its home loan business after merger till December 31, 2023.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.