Buy HDFC Bank; target of Rs 1387: Geojit BNP Paribas

HDFC Bank has consistently maintained healthy performance across all the parameters despite slowdown in the economy. Net interest income (NII) grew 22% YoY in Q1FY17 led by 23% YoY rise in advances coupled with stable net interest margin (NIM) of 4.4%. Asset quality remained broadly stable with Gross non-performing asset (GNPA) of 1.0% and Net NPA (NNPA) of 0.3%. We expect NII and net profit to grow at a healthy CAGR of 20% and 19%, respectively over FY16-18E supported by 19% CAGR growth in advances over the same period. HDFC Bank is the best placed among peers given its higher than system credit growth with best in-class asset quality and superior return ratios. We assign BUY rating on the stock with target price of Rs 1,387 based on 3.7x FY18E P/ABV.   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.