Accumulate HDFC Bank; target of Rs 1778: Arihant Capital

Arihant Capital's research report on HDFC Bank

HDFC Bank reported steady set of numbers. Interest Income increased by 13% YoY to Rs. 18,114 cr, while on QoQ basis it increased by 3%. Interest Expenses increased by 6% YoY, while on QoQ basis it decreased by 3% to Rs. 9,059 cr. Net Interest Income increased by 21% on YoY basis and 9% on QoQ basis to Rs. 9055 cr. Reported Net Interest Margin increased to 4.3 vs 4.1 on QoQ basis.

Outlook

HDFC bank continued to report balanced performance. We have valued stock on P/ABV(x) of 4(x) to its FY19E adjusted book value of Rs 445.17 per share and arrived at a fair value of Rs. 1,778. We have ‘ACCUMULATE’ rating on the stock.