JM Financial Broker Research reports

On top of its game raising TP to INR 2000 We raise our target price for HDFC Bank from INR 1800 to INR 2000 as we build the valuation for HDB Financial Services and HDFC Securities in our target price. We value these companies at INR 132/share, contributing 7% of our target price for HDFC Bank (bank valued at 4x FY19E BVPS vs 3.9x earlier). Our recent meetings with the bank's top management and various business heads give us further comfort that the bank remains in its usual solid shape with respect to growth, risk and profitability. Market share gains continue to accelerate on both corporate as well as retail loans aided by the bank's pricing advantage, solid product...

Asset quality improvement to boost RoA going forward Key takeaways from our meeting with Mahindra Finance (MMFS) management: 1) Asset quality is significantly improving due to a 5-6% improvement in collection efficiency YoY and a reduction in disposable losses on account of lower repossessions; 2) With incremental NPLs coming down, focus has now shifted to accelerate its growth; the company expects 15%+ growth in FY18 (vs. 14% in FY17) driven by growth in segments such as pre-owned vehicles, tractors and CEs; 3) Management expects RoA to improve to 2% at end-FY18 (vs. 1.1% in FY17) on a like-to-like basis (120DPD); 4) Management expects the housing subsidiary to...