Buy HDFC Bank, target price Rs 1650: Motilal Oswal

Buy HDFC Bank, target price Rs 1650:  Motilal Oswal

Motilal Oswal has buy call on HDFC Bank with a target price of Rs 1650. The current market price of HDFC Bank Ltd. is Rs 1422.15.

HDFC Bank Ltd., incorporated in the year 1994, is a banking company (having a market cap of Rs 783298.04 Crore).

For the quarter ended 30-09-2020, the company reported a Consolidated Interest Income of Rs 25119.76 Crore, down 3.30 % from last quarter Interest Income of Rs 25978.00 Crore and up 3.23 % from last year same quarter Interest Income of Rs 24333.99 Crore. The bank reported net profit after tax of Rs 7711.37 Crore in latest quarter.

Investment Rationale

HDFC Bank continues to deliver strong growth in advances, which is likely to support fee income. Deposit trend remains strong, led by CASA, which would continue to support the margin trajectory. Though slippages are likely to increase over 2HFY21, HDFCB carries a high provision buffer which would keep credit cost under control and limit the impact on profitability. It maintains Buy, with a TP of INR1,650 per share (3.6x Sep’22E ABV).

Promoter/FII Holdings
Promoters held 21.2 per cent stake in the company as of Sept 30, 2020, while FIIs held 49.1 per cent, DIIs 18.6 and public and others 11.1 per cent.

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