Emkay Global has buy call on HDFC Bank with a target price of Rs 1950. The current market price of HDFC Bank Ltd. is Rs 1414.45. Time period given by analyst is one year when HDFC Bank Ltd. price can reach defined target.
HDFC Bank Ltd., incorporated in the year 1994, is a banking company (having a market cap of Rs 812394.03 Crore).
HDFC Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2020.
Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 43364.96 Crore, up 4.65 % from last quarter Total Income of Rs 41436.36 Crore and up 8.85 % from last year same quarter Total Income of Rs 39838.73 Crore. The bank reported net profit after tax of Rs 10591.46 Crore in latest quarter.
Investment Rationale
Lifting of the RBI’s restrictions on card/digital initiatives, plans to reaccelerate retail credit growth and focus on risk-adjusted margins should be long-term positives. As far as the merger is concerned, the bank/HDFCL will have time (2-3 yrs) to moderate regulatory drag by building buffers in both entities, but at the cost of margins in the interim. Factoring in lower NIMs/higher opex, the brokerage cuts FY23-24E earnings by 2-3% and expect average sustainable RoE to moderate to ~17% from ~17.6% earlier. Further, factoring in slightly higher CoE (12.3%), it cuts the standalone bank TP multiple to 3.2x on FY24E ABV and value the bank at Rs1,950 (Rs2,050 earlier), including subsidiaries at Rs78. It retains long term Buy on the stock given the recent correction, with it trading at 2.5x standalone FY24E ABV (stripping subs value of Rs78). Key risks: Slower-than-expected credit growth amid weakening macros due to the Ukraine-Russia conflict; further softness in margins due to slower retail credit growth/regulatory buffer built up in the run-up to the merger; and delay in getting regulatory approval for the proposed merger of HDFCL
Promoter/FII Holdings
Promoters held 25.78 per cent stake in the company as of 31-Mar-2022, while FIIs owned 43.0 per cent, DIIs 17.19 per cent.
(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
