Stocks

Impressed by HDFC Bank’s stellar Q3 numbers, analysts hike target price

Our Bureau Mumbai | Updated on January 18, 2021 Published on January 18, 2021

Stock hits all-time record of ₹1,503

The stock of HDFC Bank recorded its all-time high on Monday as analysts remained bullish on the stock and hiked the price target after the bank unveiled strong third-quarter results.

After recording the peak of ₹1,503 intra-day, shares on the BSE closed the day at ₹1,483.20, up ₹16.85, or 1.15 per cent. HDFC Bank’s shares opened at ₹1,472.80 against its previous close of ₹1,466.35. On the NSE, the private bank hit the peak of ₹1,502.85.

Steady performance

While brokerages remained bullish on the stock, today’s rally was mainly on account of short covering in F&O as some had expected the stock to cool off, analysts said.

The private sector lender reported an 18.1 per cent increase in its net profit for the third quarter of this fiscal at ₹8,758.29 crore. The standalone net profit stood at ₹7,416.48 crore in the same period last fiscal. HDFC Bank’s net revenues (net interest income plus other income) grew to ₹23,760.8 crore from ₹20,842.2 crore a year ago.

 

Motilal Oswal Financial Research expects earnings of 20 per cent (CAGR) over FY20–23 for HDFC Bank. It maintained its ‘Buy’ recommendation with a revised target price of ₹1,720 from earlier ₹1,500. HDFC Bank has delivered strong business growth as reflected from the revival in retail loan growth, and disbursements across multiple segments are now higher than pre-Covid levels. Operating performance remains steady and the bank holds sufficient additional contingent provision buffer to manage residual stress, it added.

Yes Securities revised earnings estimates for FY21/22/23 by 10 per cent/3 per cent/4 per cent, respectively. The broking house expect a target of ₹1,870.

“The management is confident of sustaining growth (gradual market share gains) in retail, SME and corporate segments and the risk profile of the new acquisitions across products is significantly better than the industry, pointing towards robust asset quality performance even in future,” said Rajiv Mehta, Lead Analyst – Institutional Equities, Yes Securities. According to LKP securities, “HDFC Bank reported a resilient trend on asset quality and operating performance in Q3-FY21.” It recommended a target price of ₹1,643.

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Published on January 18, 2021
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