Buy HDFC; target of Rs 1910: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on HDFC
Standalone net profit for Q1FY18 stood at Rs 1556 crore vs. our estimate of Rs 1737 crore. The PAT is not comparable on a YoY basis owing to large one-off gains last year on account of stake sale in the general insurance business. GNPA ratio increased by 33 bps QoQ at 1.12%, (GNPA - Rs 3513 crore), while NNPA remained NIL. Such increase in NPA is the highest in last several quarters. This was on account of an exposure of Rs 909 crore as Q1FY18. As at Q4FY17, though the account was not NPA, HDFC had made adequate provisioning against this exposure. Thus, no further provisioning was required on this exposure in Q1FY18.

Outlook
With strong performance and couple of IPO’s expected in asset management industry, we have revised valuations for HDFC AMC business too.  We revise our SOTP based TP higher to Rs 1950/share (earlier Rs 1750). Re-iterate our BUY rating.

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