Buy HDFC Bank; target of Rs 1836: KR Choksey

KR Choksey's research report on HDFC Bank

NII grew to INR 194,814 Mn from INR 170,090 Mn, a growth of 14.5% YoY driven by advances growth of 21.6% YoY. The Core NIMs were stable at 4.0% in Q1FY23. PPoP grew 1.5% YoY while declined by 6.0% QoQ at INR 153,678 Mn. Fee income for Q1FY23 stood at INR 53,304 Mn while the loss on sale of investment stood at INR 13,117 Mn. Net Profit stood at INR 91,960 Mn, an increase of 19.0% YoY • Provisions for Q1FY23 were at INR 31,877 Mn as against total provisions of INR 48,308 Mn in Q1FY22. The credit cost for Q1FY23 stood at 0.91% vs 0.97% in Q4FY22 and 1.67% in Q1FY22. The GNPA were 1.28% as of June 30, 2022, vs 1.47% as of June 30, 2021. NNPA for the quarter stood at 0.35% of the net advances. Advances as of June 30, 2022, were reported at INR 1,39,50,677 Mn. The deposit growth for the quarter by 19.2% at INR 1,60,47,600 Mn with CASA ratio at 45.8%.

Outlook

We revise our target price at INR 1,836 per share (earlier INR 1,997 per share), implying a P/ABV of 3.4x P/ABV to adj. book value of INR 540.0 per share, showing an upside of 36.2% over the CMP. Accordingly, we reiterate our BUY rating on the shares of HDFC Bank Ltd.

More Info

At 16:01 hrs HDFC Bank was quoting at Rs 1,347.60, down Rs 0.05, or 0.00 percent.

It has touched an intraday high of Rs 1,358.40 and an intraday low of Rs 1,338.30.

It was trading with volumes of 200,039 shares, compared to its thirty day average of 294,411 shares, a decrease of -32.05 percent.

In the previous trading session, the share closed down 1.19 percent or Rs 16.20 at Rs 1,347.65.

The share touched its 52-week high Rs 1,724.30 and 52-week low Rs 1,271.75 on 18 October, 2021 and 17 June, 2022, respectively.

Currently, it is trading 21.85 percent below its 52-week high and 5.96 percent above its 52-week low.

Market capitalisation stands at Rs 748,632.36 crore.

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HDFC Bank - 190722 - kr