Sharekhan's research report on HDFC BankFor Q4FY2016, HDFC Bank has reported a 20.2% Y-o-Y growth in net profit driven by strong growth in net interest income (up 24.0% YoY). Advances during the quarter surged by 27.1% YoY while net interest margin stood at similar levels. The non-interest income for Q4FY2016 was up by 11.8% YoY due to decline in treasury and forex income, however fee income reported a healthy growth of 18.4% YoY. HDFC Bank has maintained its superior performance despite challenging environment. We believe that improving economic scenario and falling interest rate cycle would help the bank to maintain its growth momentum as the bank is well capitalised to grasp this opportunity. We expect earnings to grow at a CAGR of 22.2% during FY2016-18 resulting in an RoA of 1.9%. We have revised our price target to Rs1,300 by valuing the stock at 3.4x its FY2018E BV, and maintained our Buy rating on the stock. 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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