Buy HDFC Bank; target of Rs 2100: Sharekhan

Sharekhan is bullish on HDFC Bank has recommended buy rating on the stock with a target price of Rs 2100 in its research report dated July 03, 2023.

Broker Research

July 04, 2023 / 18:24 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on HDFC Bank

HDFC Bank (merged entity) is attractively positioned ahead of the new decadal investment cycle to capture a large share in the fastest-growing Indian economy. There is a strong runway for sustained growth ahead, led by large scale, strong distribution network and wider financial product suites. The franchise has always been ahead of its peers not only in terms of smoothly navigating the tough economic cycles but also in sustaining superior profitable growth along with pristine asset quality across cycles and its track record is unmatched across the sector. Customer acquisition, higher productivity gains led by improvement in the vintage of branches, sustained cost reduction driven by accelerated investments in technology, and cross-selling of wider product suites are the key drivers for sustainable growth over the medium term.

Outlook

The macro outlook is positive, which should support asset quality and in turn lower credit cost in the near to medium term, offsetting higher upfront expansion cost and merger-related integration cost. The bank is confident of keeping long-term profitability metrics (1.9-2.1% ROA) with high teen growth. At the CMP, the bank trades at 2.5x and 2.2x its FY2024E and FY2025E Core BV, respectively. We maintain our Buy rating on the stock with a revised PT of Rs. 2,100.

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