Even as the economy slows down, HDFC Bank is expected to post growth going ahead, analysts said.
Even as the economy slows down, HDFC Bank is expected to post growth going ahead, analysts said. The private sector lender is well positioned on account of its strong capital position, Reliance Securities said in a note. “Its strong capital position, digital leverage, and impeccable asset quality performance across cycles should continue to aid return ratios with RoA/RoE at 1.9%/16% for FY21E. At CMP, the stock trades at FY21E multiple of 3.5x. We continue to maintain our positive stance on the bank,” the brokerage also said.
HDFC Bank on Saturday posted a 26.8 per cent on-year surge in standalone net profit at Rs 6,345 crore for the second quarter of the ongoing fiscal. The bank posted Rs 5,005.73 crore profit in the corresponding quarter last year. It reported 14.89 per cent rise in net interest income (NII) at Rs 13,515.0 crore crore as against Rs 11,763.4 crore in the same quarter last year. Net interest margin (NIM) for the quarter came in at 4.2 per cent.
CITI maintained ‘buy’, raising the target from Rs 1400 per share to Rs 1520 per share. The FY20/21 PAT estimates were raised by 5 per cent to 7 per cent on tax benefit by the brokerage.
The net revenues (net interest income plus other income) of the private sector lender surged by 21.1 per cent to Rs 19,103.8 crore for the quarter from Rs 15,779.0 crore in the same quarter of the previous year. Due to its earnings potential and past performance, the Street has rewarded the stock, which has jumped almost 16 per cent so far this year. The shares of the HDFC Bank gained 0.7 per cent on Friday to close at Rs 1,229.20 in the intraday trade.