Prabhudas Lilladher is bullish on HDFC Bank has recommended buy rating on the stock with a target price of Rs 2700 in its research report dated April 21, 2019.
Prabhudas Lilladher's research report on HDFC Bank
HDFCB earnings were better with growth of ~23% YoY at Rs58.8bn (PLe: Rs57.7bn) on back of strong NII growth of ~23% and lower provisioning as asset quality was largely steady. Bank consciously has slowed retail growth in certain segments which grew at 19% YoY, while overall loan growth was supported by non-retail which were largely short term in nature (some NCLT backing). Tone on Agri continues to remain cautious and hence continues to add to contingent provisions. Bank has been able to retain superior NIMs on well managed portfolio mix but liabilities seem to be a challenge in near term and hence we keep an eye on cost of funds.
Structurally bank continues to deliver 20% CAGR earnings with better margin profile and strong asset quality, leading us to retain BUY rating with revised TP of Rs2,700 (from Rs2,371) as we roll forward to Mar-21 ABV based on 3.9x multiple.
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