Motilal Oswal's research report on HDFC Bank
At its analyst day meet, HDFCB management highlighted how the bank is getting future-ready by focusing on strengthening its digital capabilities and sustainable growth after the merger while maintaining RoA at the current level. The bank plans to announce various new initiatives to provide a superior experience to customers. For the bank, technology has moved from being an enabler to being a driver of outcomes. The bank has emphasized that running the bank includes modernizing the existing infrastructure , along with building competencies and CoE. Growth is likely to be broad-based, mainly driven by technology and expanding distribution network, while improved cross-selling will further augment revenue growth.
Outlook
The bank highlighted that the cost-to-income (C/I) ratio may remain sticky for the near term but could decline to 30% over the next 10 years. HDFCB remains one of our preferred picks and we maintain our Buy rating with a TP of INR1,950.
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