Moneycontrol
Get App
Last Updated : Aug 06, 2019 04:24 PM IST | Source: Moneycontrol.com

Accumulate HDFC; target of Rs 2270: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on HDFC with a target price of Rs 2270 in its research report dated August 03, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on HDFC


HDFC's Q1FY20 earnings with PAT at Rs32bn up 46% YoY was largely supported by subsidiary stake sale gains (Rs18.9bn) and income on subsidiary investments. The quarter saw steady NIMS at 3.3% although non-individual spreads shrunk moderately. As corporate portfolio slackens, the overall loans stood sluggish at 13% YoY growth as against PL expectation of 15%; said that, individual loan traction stood upbeat at 17% YoY. While HDFC's credit risk profile stands robust, Q1FY20 saw moderate asset quality deterioration reflective of macro slowdown. GNPA at 1.29% stood higher than expectations of 1.2%, ECL provisioning climbed to 1.55% from 1.44% in Q4FY19. As macro headwinds play out, the margin-NPA maintenance conundrum has come to fore. While HDFC maintains competitive superiority the spreads should stand maintained, however, GNPA and loan traction (15%) should see slight downward pressures for FY20.


Outlook


Against this backdrop, we trim our core book multiple to 2.6x (earlier 2.7x) arriving at TP of Rs2,270 (earlier Rs 2,274) at Mar-21 PABV. Downgrade to ACCUMULATE.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.



Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Aug 6, 2019 04:24 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant