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Last Updated : Jul 21, 2020 01:54 PM IST | Source: Moneycontrol.com

Buy HDFC Bank target; of Rs 1470: ICICI Securities

ICICI Securities is bullish on HDFC Bank recommended buy rating on the stock with a target price of Rs 1470 in its research report dated July 19, 2020.

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ICICI Securities research report on HDFC Bank


HDFC Bank’s Q1FY21 performance was commendable and the management’s narrative was resilient, despite challenges reflected in: 1) Morat 2.0 portfolio at 9% (lowest heard till now), 2) confidence in credit reserves of ~55bps coupled with 76% NPL coverage being sufficient ceteris paribus, 3) digital initiatives, franchise strength and sharp focus helping capture opportunities without compromising quality. Market share gain (21% advance growth), steady NIMs at 4.3% (despite 70bps MCLR cut) and operating cost agility (down 24% YoY ex-employee cost) aided 7% core operating profit growth in the most disrupted quarter. Accelerated recognition of 30bps of advances and expedited provisioning (coverage up 4%) initiated on non-morat pool – though contingency buffer was limited at mere 10bps.


Outlook


Earnings growth of 20% was buoyed by treasury gains of Rs10.9bn. Performance reaffirms our stance that HDFC Bank will lead responsibly and is best positioned to rebound quicker offsetting nearterm weakness. Maintain BUY.





For all recommendations report, click here


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First Published on Jul 21, 2020 01:54 pm
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