Ajcon Global is bullish on HDFC Bank and has recommended 'Buy' rating on the stock with a target price of Rs 740 in its research report dated July 18, 2013.
Ajcon Global's report on HDFC Bank
"HDFC Bank, on lending front, the pace of retail credit expansion will be higher than loans to companies. In an election year, we are likely to see some pick-up in domestic consumption. A good monsoon too is a positive trigger for the economy. We do not see much of a scope for any base rate reduction as the bank cannot reduce its deposit rates. HDFC Bank's conservative lending strategies have helped it maintain consistently strong growth and outperform local peers struggling with an increase in bad loans. Historically, Bank has managed well in terms of maintaining its margins in interest rate cyclical environment along with a high CASA ratio with stable NPAs in the past, high provision coverage ratio of 74.7 percent, and robust quality franchise as compared to peer banks, which deserves a premium. It has proved that it is one of the safe heavens in the Banking sector as well and has a long journey ahead in years to come and achieve a gigantic scale. HDFC Bank is expected to deliver earnings CAGR of 25 percent+ over FY13-FY15E. We recommend a 'Buy' with a target price of Rs 740 for investors with 9-12 months horizon and believe that this stock offers Wealth Creation Opportunity for investors having a view of more than 10 years," says Ajcon Global research report.
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