Buy HDFC Bank; target of Rs 1930: Motilal Oswal

Motilal Oswal is bullish on HDFC Bank recommended buy rating on the stock with a target price of Rs 1930 in its research report dated January 15, 2023.

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January 16, 2023 / 16:14 IST

26 Aug, 2025 12:21

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Motilal Oswal's research report on HDFC Bank

HDFCB reported an in-line quarter. PAT was up 19% YoY, supported by a pickup in NII growth and controlled provisions. NIMs stood stable QoQ. PPoP growth remained modest at 13% YoY. However, Core PPoP grew by a healthy ~19% YoY. Loan growth was driven by strong traction in Commercial and Rural Banking and Retail loans. The corporate book witnessed a marginal QoQ decline. Asset quality ratios remained stable even as slippages were high at INR66b due to high Agri slippages. The restructured book declined to ~42bp of loans (v/s 53bp in 2QFY23). Healthy PCR of ~73% and a contingent provision buffer (62bp of loans) should support asset quality. We estimate a ~19% PAT CAGR over FY22-25, with RoA/RoE at 2.0%/17.7% in FY25. We expect the stock to perform gradually as the margin profile revives and the merger-related overhang eases (bank aims to complete the merger by 1Q/2QFY24). Maintain Buy.

Outlook

We maintain our Buy rating with a TP of INR1,930 (premised on 3.0x Sep’24E ABV). We expect the stock to perform gradually as the margin profile revives and the merger related overhang eases (bank aims to complete the merger by 1Q/2QFY24).

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