Accumulate HDFC Bank; target of Rs 2450 : Dolat Capital

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Dolat Capital's research report on HDFC Bank

HDFC bank reported a steady profit growth of 20% YoY aided by a NII growth of 22% YoY on stable NIMs, a robust core fees (27% YoY) coupled with the support of investment gains and improving costs (C/I lower by ~200 bps). The only variation was the higher credit costs at 19 bps of assets, of which 3 bps is contingency provisions on the agricultural portfolio in anticipation of likely political stress. The asset quality worsened, with GNPA increasing 5 bps to 1.38%. Fresh slippages were 0.34% of total assets at ` 400bn, higher by 22% sequentially.

Outlook

We maintain our estimates, on rollover. We have factored an advance and PAT CAGR of 25% and 20% over FY19-20E and improving RoA at 1.9% Valuing the bank at 3.3x FY21E P/ABV, Accumulate.

For all recommendations report, click here

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