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Buy HDFC; target of Rs 2900: Prabhudas Lilladher

Prabhudas Lilladher is bullish on HDFC has recommended buy rating on the stock with a target price of Rs 2900 in its research report dated July 29, 2022.

July 31, 2022 / 03:26 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.


Prabhudas Lilladher's research report on HDFC


HDFC’s earnings missed estimates led by sequentially lower core metrics. AuM growth was largely in-line at 17% YoY mainly driven by individual loans while NII and margins were lower. Core PPoP was lower by 8%, while higher provisions led to PAT miss by 11.5%. As per management, ROE expansion would be driven by NII growth, controlled opex and decline in credit costs. Management indicated that home loan demand remains strong while construction finance & LRD could see an uptick. With respect to merger, few approvals have been received, while dispensation on stake in subsidiaries is yet to be clarified.


Outlook


We retain our multiple at 2.3x based on FY24 P/ABV and TP of Rs2,900 with BUY rating.


For all recommendations report, click here

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first published: Jul 31, 2022 03:26 pm
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