Robust YoY Loan Growth Reported, Buy This Bank Stock For 36% Yield: Motilal Oswal Suggests

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Target price, current market price

The current market price (CMP) of HDFC Bank is Rs. 1,355. Motilal Oswal has estimated a target price for the stock at Rs. 1,850. This stock has the potential to yield a 36% return, in the next year 1. It is a large cap stock with a market cap of around Rs. 751,308 crores.

Stock market outlook
Current market price (CMP) Rs. 1,355
Target price Rs. 1,850
Potential return over 1 year 36.53%
Stock price at 52-week high Rs. 1,725
52 week low price Rs.1,271.60

The deposit base of the bank increased by 19.3% YoY and 2.9% QoQ to Rs. 16.1t. CASA deposits were up 20% year-on-year, but fell 2.2% quarter-on-quarter. CASA mix down 220bp QoQ to 46%. Retail/wholesale deposits grew 18.5%/22.5% YoY and 3.5%/0.5% QoQ. Business and other wholesale books also recovered and were up 15.5% YoY (fixed QoQ).

Stock Advantages: Motilal Oswal

Stock Advantages: Motilal Oswal

Commenting on the stock, Motilal Oswal said, “HDFC Bank saw solid year-on-year loan growth, but the same was below trend on a sequential basis. support the growth of POPP. We expect the margin trajectory to gradually recover in FY23, while higher growth in retail lending and unsecured products will support fee income. The trend in retail deposits has softened, with the bank seeing a sequential decline in its CASA to 46%.”

“The bank purchased loans totaling Rs. 95.3 billion in 1QFY23, through the direct assignment route, under a home loan agreement with HDFC,” the brokerage firm added.

Company profile:

Company profile:

HDFC Bank is one of India’s leading private banks and was among the first to receive approval from the Reserve Bank of India (RBI) to establish a private sector bank in 1994. HDFC Bank offers a wide range of banking services commercial and transactional business. and organizations of all sizes. HDFC Bank has a banking network of 6,342 branches and 18,130 ATMs in 3,188 cities. The bank’s total advances recovered and grew at a healthy pace of 21.5% year-on-year. Sequentially, advances increased by 1.9% (from 8.6% in 4QFY22) to Rs. 13.9t.

Disclaimer

Disclaimer

The stock above was taken from Motilal Oswal’s brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.

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