Accumulate HDFC Bank; target of Rs 1685: Systematix

Systematix's research report on HDFC Bank

In 4QFY17, the bank’s retail advances grew 23.5% yoy, faster than the overall credit growth. Of these, while personal loans and credit cards segments grew 34.1% yoy and 26.7% yoy respectively, mortgages grew 20.5% yoy. Commercial vehicle (CV) loans grew a robust 22.6% yoy, and business banking loans saw a healthy growth of 16.5% yoy.

Outlook

We increase the target price from Rs 1,555 to Rs 1,685, as we value the bank at 3.8x FY19e BV (earlier 3.7x 1HFY19e BV) and revise the rating from a Buy to Accumulate. At our target price, the stock would trade at PBV of 4.5x FY18e and 3.8x FY19e.