Insights

HDFC Bank

August 21, 2018 . Equities Admin

Enviable performance to continue… HDFC Bank, a new-generation bank, is the second largest private sector bank in India. The Bank has a nationwide distribution network of 4,804 branches and 12,808 ATM’s in 2,666 cities/towns as of Q1FY19. The bank has grown its balance sheet at a healthy pace of 22% CAGR over FY13-18 maintaining high profit CAGR of 21%.

Valuation: HDFC Bank delivered another quarter (Q1FY19) with strong and stable performance. We are structurally positive on the bank given its topnotch asset quality, robust retail franchise, strong balance sheet growth and best-in-class management pedigree. Further, with its recent capital raising plan of Rs24,000cr, the bank is expected to accelerate balance sheet growth from here and continue gaining market share in both assets and liabilities. We expect the bank to maintain superior return ratios with RoE of ~19% and RoA of ~2% over FY18-20E. As a result, HDFC bank will continue to enjoy premium valuation within banking space. Hence, we maintain a BUY rating on the stock with a target price (TP) of Rs2,388 (4.4x FY20E P/ABV).

Research-Report – HDFC Bank

Investments in equity shares, debentures, etc., are not obligations of, or guaranteed by Wealth India Financial Services Pvt. Ltd., and are subject to investment risks. Click here to read our full disclaimer.

Get FundsIndia’s articles delivered straight to your inbox!

Enter your email address to get:

  • Mutual fund recommendations from experts
  • Buy, hold or sell calls for stocks
  • Investment tips and tricks
  • All the latest news from Fundsindia.com

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.