Hold HDFC; target of Rs 2040: ICICI Direct

ICICI Direct's research report on HDFC

Given the unfavourable lending environment, advances growth was slower at 11.2% YoY to Rs 4,16,597 crore compared to the previous run rate, on the back of moderation in corporate book. Though individual loan portfolio increased ~15.3% YoY to Rs 297502 crore and accounted for ~71% of total loan book, growth in non-individual book was curtailed at 1.5% YoY to Rs 112105 crore. Growth in individual loan book, after adding back loans sold in the preceding 12 months, remained healthy at 24% YoY.

Outlook

Accordingly, we revise our SOTP (15% discount) based target to Rs 2040/share (earlier Rs 2195). Given recent headwinds, we maintain our HOLD (with negative bias) recommendation on the stock.