Motilal Oswal is bullish on HDFC has recommended buy rating on the stock with a target price of Rs 2000 in its research report dated October 30, 2017.
Motilal Oswal's research report on HDFC
HDFC reported strong numbers overall. While there was a 5% miss on core PBT, a QoQ rise in the share of individual AUM was a positive surprise. Individual loans grew 4% QoQ and 16% YoY, driven by 23% disbursement growth in individual loans. This is the second quarter of 20%+ growth in individual lending, which is very commendable.
HDFC’s retail loan growth is impressive, despite intense competition and a high base. Over the past four quarters, corporate loan growth has also picked up smartly – this remains a key for overall spreads, considering individual spreads are under pressure. The company continues to improve its expense ratio, which directly impacts RoA and RoE. We largely maintain the estimates. Buy with an SOTP-based TP of INR 2,000.
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