HDFC Bank Ltd. share price target

HDFC Bank was incorporated in August 1994. It provides corporate banking and custodial services and is also involved in treasury and capital markets. In addition, it offers project advisory services and capital market products,...

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The core fee income of the bank has jumped 26% yoy and 27% qoq in Q2FY2022 recovering from the impact of second covid wave in Q1FY2022. The Net Interest Margins (NIMs) of the bank was flat at 4.1% in Q2FY2022 on sequential as well as over a year ago level. The bank has exhibited healthy improvement in the CASA deposits...

Credit as well as deposit growth improved: HDFCB reported improvement in credit growth to 15% YoY vs 14.4% YoY. Domestic Corporate book slow down to 6% (10% in Q1FY22) and retail book improves to 13% vs 9% YoY (Q1FY22). Deposits growth improved to 14% YoY (4% QOQ) vs 13% YoY in Q1FY22; CASA deposits grew by 28% resulted CASA ratio at 46.8% vs 45.5% YoY. Asset quality improved; restructuring at 152bps: Bank Asset quality improved with GNPA at 1.35% vs 1.47% YoY (1.32% QoQ); NNPA at 0.4% vs 0.48% YoY. Credit cost comes in at 1.3% vs 1.7% QoQ (1.8% YoY). Bank annualized slippages stood at 1.8% vs...

HDFC Bank reported a strong trend on assets quality and operating performance in 2QFY22. The absolute GNPA amount decreased 4.4% sequentially, which resulted in improvement in GNPA ratio to 1.35% v/s 1.47% in the previous quarter. The reported GNPA is well below the...

HDFCB remains one of the resilient stocks in the sector and we maintain a BUY on the stock with a revised target price of Rs 1,935/share (SOTP basis core book at 3.9x FY23E and Rs 70 Subsidiary Value).

HDFCB reported an inline quarter with NII/PPoP growth of 12%/14% YoY and PAT growth of 18% YoY to INR88.3b (inline). Profitability came in strong despite creating an additional contingent provision of INR12b, thus taking the total buffer to ~INR78b (~0.65% of loans). The bank witnessed a healthy pickup in business momentum as deposits / loans were up 4.5% QoQ each. Retail segment grew ~13% YoY while Commercial and Rural Banking grew robustly at 27.6% YoY. CASA deposits grew 29% YoY and the ratio now stands at 46.8% (+130bp QoQ)....

We maintain a BUY on the stock with a target price of Rs 1770/share (SOTP basis core book at 3.6x FY23Eand Rs 48 Subsidiary Value).

As per media reports, the Reserve Bank of India (RBI) has partially lifted restrictions placed on HDFCB in Dec'20, and has allowed the bank to source new Credit Cards. However, the restrictions on new digital application launches will continue. The RBI's move addresses the key overhang as HDFCB is the largest Credit Card issuer in the country, and this segment is key to the bank's overall profitability. In recent quarters, the bank reported a moderation in fee income/NII, affected by...