Buy HDFC Bank; target of Rs 1,265: Angel broking

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26 Aug, 2025 12:21

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Angel broking's report on HDFC BankHDFC Bank continued its trend of delivering consistent earnings performance quarter after quarter. For 2QFY2016, it registered a net profit growth of 20.5% yoy which is in line with our expectation.Advances grow strongly; Asset quality top-notch:During 2QFY2016, the loan book grew at a rapid pace, ie by 27.9% yoy. Retail growth picked further traction; the growth in the retail book was at 29.3% yoy, which took the total contribution of retail as a proportion of total advances book to 49%. Corporate credit growth rate, at 23.4% yoy, stood well above that of the industry. Current and Savings account deposits also saw fairly healthy growth, ie of 20.8% yoy and 18.7% yoy, respectively. Time deposits saw further stronger momentum, growing at 37.8% yoy, which continued to outshine the CASA deposits growth. Because of the spurt in fixed deposits and in-turn total deposits, the CASA ratio came in at 40%.Outlook and valuation: Credit and deposit growth beat the industry growth rate, driven by strong retail business, healthy CASA and continued network expansion. This provides strong visibility for a robust 20% earnings trajectory, coupled with high quality of earnings. This in our view justifies a premium valuation multiple. At the current market price, the bank is trading at 3.3x FY2017E ABV. We recommend a Buy rating on the stock, with a target price of `1,265, says Angel broking research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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