
Domestic brokerage firm Motilal Oswal has retained its Buy rating on HDFC Bank post its Q4 earnings, citing that the bank’s core performance came in-line with estimates and its margins too improved on a sequential basis. The brokerage has a target price of Rs 1,950 on HDFC Bank shares. The target price for HDFC Bank shares implies a 27.3% surge in the stock price from its previous close of Rs 1,531 on the NSE.
HDFC Bank delivered a healthy quarter with NIMs improving 4bp QoQ while CD (Credit-Deposit) ratio declined 6% QoQ to 104%. PAT (adj. for one-offs) and NII both stood in-line, said Motilal Oswal in its note post Q4 earnings. The brokerage expects the private lender to deliver 13.5%/18% CAGR in loan/deposit over FY24-26, while earnings compound at 16% CAGR, translating into an RoA/RoE of 1.9%/15.5% by FY26.
“We reiterate our BUY rating with a TP of INR1,950 (premised on 2.4x FY’26E ABV + INR253 for subs),” Motilal Oswal said.
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.