Buy HDFC Bank; target of Rs 2780: Motilal Oswal

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Motilal Oswal's research report on HDFC Bank

We attended HDFC Bank’s (HDFCB) Annual Analyst Meet, wherein the bank highlighted the progress that its different businesses are making and the steps being undertaken to maintain its strong competitive positioning and deliver sustainable growth. HDFCB remains confident about its strategy to deepen presence in the suburban and rural regions and offer full product suite to customers. Moreover, the bank highlighted that its strong analytics, faster turnaround time and targeted customer servicing will ensure enhanced relationship value in metro/urban regions. Management also shared its views on various areas, ranging from succession planning to digital initiatives, competitive positioning, subsidiary performance and the journey ahead. This note captures the detailed takeaways from the meet and we have followed it up with our thoughts on the bank.

Outlook

Margins are likely to remain stable, while strong control on operating leverage is likely to result in steady return ratios (RoA/RoE of 1.9%/17.2% in FY21E). We maintain our Buy rating with a target price of INR2,780 (3.8x FY21E ABV).

For all recommendations report, click here

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