
Brokerage firm Nuvama upgraded HDFC Bank to a Buy rating after the private lender released its Q4FY24 earnings on Saturday. The brokerage has also increased its target price on HDFC Bank shares to Rs 1,760 from Rs 1,735 earlier — a marginal increase. However, the target price for HDFC Bank shares implies a nearly 15% upside in the stock price from previous close of Rs 1,531.30 on the NSE.
HDFC Bank delivered in-line NII and nullified one-off income with one-off expenses, including floating and ex-gratia provisions. LDR and LCR, the key monitorables, improved with high deposit and low loan growth, Nuvama said in its post earnings note on HDFC Bank. The brokerage has further cut its EPS estimate by 2%/3% for FY25E/FY26E but roll base to FY26E.
“We believe short-term price performance shall be driven by the consistency of quarterly earnings. With LDR above 100%, we reckon volatility in quarterly earnings shall persist for some time,” Nuvama 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.