Insights

HDFC Bank

November 3, 2017 . Equities Desk

Structural strength to drive earnings…

HDFC Bank, a new-generation bank, is the second largest private sector bank in India. The Bank has a nationwide distribution network of 4,729 branches and 12,259 ATM’s in 2,669 cities/towns as of Q2FY18. The bank has grown its balance sheet at a healthy pace of 21% CAGR over FY12-17 maintaining high profit CAGR of 23%.

Valuation: We are structurally positive on HDFC Bank considering its best inclass asset quality (Gross/Net NPA of 1.3%/0.4% by FY19E), superior deposit franchise and credit underwriting ability. It will help the bank to maintain superior return ratios with RoE of 20% and RoA of 2% over FY17-19E. Overall, the bank is well placed to benefit from the expected pick-up in the economic growth cycle. Hence, we maintain a BUY rating on the stock with a target price (TP) of Rs2,000 (4.6x FY19E 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.