Buy HDFC Bank; target of Rs 1135: Firstcall Research

Firstcall Research's report on HDFC Bank

"HDFC Bank delivered credible performance inspite of slowing economy and high interest rates. Net Profit of the second largest private sector bank in India rose by 20.65% YOY at Rs. 28069.10 mn against Rs. 23265.20 mn in corresponding quarter of the previous year. Net Interest Income for the quarter also grew in double digits at 21.41% YOY. Net Interest Income (NII), core income of the bank expanded from Rs. 49526.40 mn to Rs. 60131.50 mn in Q4 FY15. Interest on advances and income on investments, two main constituents of interest earned rose by 15.81% and 37.84% respectively. Advance and deposits rose by 20.60% and 22.70% at Rs. 3654950.00 mn and Rs. 4507960.00 mn respectively in Q4 FY15. Inspite of slowdown in domestic economy, retail banking revenues grew by 18% in Q4 FY15."

"Other banking business jumped by 23% in the March quarter and stood at Rs. 17836.00 mn. The bank’s treasury segment grew in double digits in Q4 FY15 compared to the corresponding quarter of the previous year. Savings account deposits grew 21.1% over the previous year to reach Rs. 1249270.00 mn and current account deposits at Rs. 735650.00 mn, grew 19.6% over the previous year. CASA mix was 44.0% as on 31st March, 2015.With high growth in deposits, low NPAs, double digit Net Profit and wide network of 4014 branches, HDFC is undisputed pick for stable returns for long term investment. Thus we recommend BUY for the scrip at a target price of Rs 1135 for medium and long term", says Firstcall Research Report.

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