Hold HDFC Bank; target Rs 600: ICICIdirect.com
Brokerage house ICICIdirect.com has recommended hold rating on HDFC Bank with a target price of Rs 600, in its October 2013 research report.
October 17, 2013 / 17:47 IST
ICICIdirect.com's report on HDFC Bank
"HDFC Bank, the trend of 30 percent YoY rise in profitability for more than a decade was broken as estimated. PAT at Rs 1982 crore was up 27 percent YoY & in-line with our estimate (Rs 1977 crore). However, as the bank recognised entire Rs 135 crore of MTM losses on AFS/HFT portfolios in Q2FY14 itself rather than spreading it over remaining quarters, PAT came lower by ~Rs 77 crore. NII growth was below expectation at 15.3 percent YoY & 1.3 percent QoQ owing to 25 bps dip in NIMs to 4.3 percent and lower credit growth of 16 percent YoY. Absolute GNPA increased by Rs 223 crore vs. Rs 384 crore rise in Q1FY14 mainly due to stress in CV/CE segment. Maintain HOLD with revised TP of Rs 600 (Rs 570 earlier).""The operating performance remains healthy as investments made earlier are aiding profitability owing to improved productivity. Return ratios remain better than peers with RoA above 1.8 percent & RoE above 21 percent. Though PAT traction has declined, the inherent structural strength of the bank remains intact and may continue to find investor interest in the current environment. However, we believe at 3.4x FY15E ABV, most positives have been factored in. We maintain HOLD with a revised TP of Rs 600 (3.1x FY15E ABV)," says ICICIdirect.com research report.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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