hdfc bank share price: HDFC Bank shares fall despite strong Q4 results; should you buy the stock?
The HDFC Bank shares were trading at Rs 1,666.10 on the NSE on Monday at 9:40 am and were down by Rs 26.35 or 1.56% from the Thursday closing price.
The HDFC Bank share prices followed the overall weakness in the stock markets triggered by the rout in Infosys, which fell nearly 12% at 10 am. The 50-stock Nifty50 was trading at 17,613.95, down by 214.05 points or 1.2%.
Kotak Institutional Equities: Buy | Target: Rs 1,925 | Upside: 14%
Kotak Institutional Equities maintains a ‘buy’ rating with Future Value at Rs 1,925 (from Rs 1,800 earlier). “At our FV, we value the bank at 2.7X book and 17X 2025 EPS for RoEs at 16% levels and 15% CAGR (adjusted for merger), respectively. We believe that the long-term investment thesis of the bank looks solid, though near-term concerns would be the factors mentioned above,” the brokerage said.
ICICI Securities: Buy | Target: Rs 1,990 | Upside: 17%
ICICI Securities maintains a ‘Buy’ on HDFC Bank stock with a revised target price of Rs 1,990 based on 3.1X September 24E book (previous: Rs 1,874 based on 3.2X FY24E book).
Sharekhan: Buy | Target: Rs 1,920
Sharekhan maintains a ‘buy’ rating on the stock with an unchanged price target of Rs 1,920. “We believe that the long-term investment thesis of the bank remains intact. The risk of a de-rating on a standalone basis appears to be quite low given that the business performance is holding up well. The bank is well-capitalized, has strong execution capabilities, can manage its growth levers along with its best-in-class asset quality across cycles and deliver superior return ratios irrespective of economic cycles,” the domestic brokerage said in a report. Slower growth in retail deposits mobilisation, lower margin than expected are potential risks.
Prabhudas Lilladher: Buy
Maintaining multiple at 3.0X roll forward to FY25E core ABV, the brokerage firm raised the target from Rs 1,850 to Rs 1,925 an retained a ‘buy’. Valuation is at 2.6X FY25 core ABV.
Investec: Hold | Target: Rs 1,720
The brokerage firm maintains a ‘hold’ on HDFC Bank highlighting that the merger-related concerns were left unaddressed by the management in company’s quarterly earnings disclosure. It also pointed out that the retail deposits is a concern for the largest private lender, though headline deposits remain strong.
Motilal Oswal: Buy | Target: Rs 1,950
“We uphold our earnings projection and estimate a 19% PAT CAGR over FY23-25, with RoA/RoE at 2.0%/17.7% in FY25. A potential pick up in margins and progress on the merger would be the key monitorables. We reiterate our Buy on the stock,” Motilal Oswal said. It puts the price target at Rs 1,950 or 15% upside.
The operating profit, which stood at Rs 18,620 crore, was up 13.8% YoY and down 2.1% QoQ, and was lower than ICICI Securities estimate of Rs 19,500. It was on account of continued investment in branches and employees that led to an elevated opex-to-assets ratio of 2.26% and cost-to-income at 42%, the brokerage firm said.
Regulatory costs associated with the imminent HDFC merger, and elevated opex are key risks the domestic brokerage firm pointed out.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
