Buy HDFC Bank; target of Rs 1869: LKP Research

LKP Research's research report on HDFC Bank

HDFC Bank reported stable operating performance in 3QFY23. In 3QFY23, the provisioning expenses were lower sequentially at ₹28bn (v/s ₹32.4bn 2QFY23). At the same time NII growth was strong (24.6% YoY, 9.4% QoQ) against the loan growth (19.5% YoY, 1.8% QoQ). Furthermore, the contingent stands adequate. The bank reported stable NIMs at 4.3%., the bank has reported sequential increase in PAT by 15.6% and ROA/ROE of 2.2%/18.3%. The reported GNPA is below the historical trend of 1.4% .

Outlook

We believe, superior underwriting practices, higher liquidity, adequate coverage and strong capital position makes the bank well placed and we recommend BUY with price target of ₹1869.