HDFC Bank Share Price Target: ICICI Securities upgrades to Buy post Q4, target price implies a 20% rally from current levels

ICICI Securities upgrades HDFC Bank to Buy from
Add following its Q4 earnings, target price for HDFC Bank shares remains unchanged at Rs 1,850.

Brokerage firm ICICI Securities has upgraded its rating on HDFC Bank post its Q4 earnings that came in on Saturday, April 20. The brokerage has upgraded the rating for the stock to Buy from Add earlier, while the target price of Rs 1,850 on HDFC Bank shares remains unchanged. The target price for HDFC Bank shares however implies a 20% rally in the stock price from its previous close of Rs 1,531 on the NSE on Friday, April 19.

HDFC Bank delivered a strong show in both reported and adjusted ROA (Return on Assets), said brokerage firm ICICI Securities in its note post Q4 earnings. The brokerage expects gradual re-rating on sustained deposit growth going forward. HDFC Bank has broadly utilized bulky treasury gains & tax write-backs towards floating provisions & staff ex-gratia, said ICICI Securities.

The brokerage expects the bank’s deposits to grow at a CAGR of 18%, which implies a 15% incremental market share. However, they expect a slowdown in the loan growth and have cut their estimates to 13% for FY25-FY26E.

HDFC Bank’s standalone net profit for the quarter ended March 2024 came in at Rs 16,511 crore against Rs 16,373 crore posted in the last quarter. The bank’s net interest income for the quarter stood at Rs 29,077 crore against Rs 28,470 crore in the previous quarter of the same fiscal. The bank’s Gross NPA (Non Performing Assets) came in at 1.24% against 1.26% in the previous quarter. Net NPA however rose to 0.33% in Q4FY24 from 0.31% in Q3FY24.