Housing Development Finance Corporation (HDFC) share price fell more than 2.1% on Thursday morning as the top Sensex laggard. The stock fell a day after the mortgage lender announced its October-December quarterly results where it reported a net profit of Rs 3,260 crore, up from Rs 2,925 crore in the year-ago period. HDFC’s share price was in the red at an intraday low of Rs 2,557 per share, falling 2.12%. Analysts, however, remain bullish and retain ‘buy’ calls on the stock.

Stock talk: Should you buy HDFC shares?

Kotak Securities: BUY

Analysts at Kotak Securities said that HDFC is in a sweet spot. “HDFC remains well placed to capture growth in the real estate upcycle –individual disbursements are already close to peak (driven by mid-to-higher end of the salaried home loan market), high-yield construction finance will likely pick up with launch of new projects,” they said in a report. HDFC’s pricing power is expected to remain strong with most NBFCs slowing down in real estate lending. “ We retain BUY on HDFC with SOTP based FV of Rs 3,400; at our FV for core business, HDFC will trade at 2.9X FY2024E core book,” they said. The pinned target price suggests 33% upside.

ICICI Securities: BUY

ICICI Securities said that HDFC’s third-quarter credit cost at <27bps surprised positively leading to an earnings beat. The mortgage lender has managed to bring the overall stress pool down on-quarter basis. “Individual AUM growth of >15% and provisioning buffer of 2.45% of advances improve visibility on growth and credit cost outlook. Maintain BUY with SoTP-based target price of Rs 3,550 per share,” ICICI Securities said. Behaviour of 21.8% non-individual stress pool, and rising competition in retail segment are key monitorable for HDFC, according to the brokerage firm. ICICI Securities sees 39% upside potential.

CLSA: Outperform

HDFC’s valuations have corrected by 15-20% and incremental risk-reward has improved since November last year which has made which have led CLSA to pin an Outperform rating on the scrip. “We cut FY23/24CL estimates by 4-5% mainly due to the margin miss and tougher outlook for incremental mortgage spreads,” CLSA said. They added that the turning rate cycle bodes very well for HDFCs growth outlook and with recent under-performance valuations is undemanding. CLSA has a target price of Rs 3,050 per share.The stock will need to soar 19% to touch the target price.

JM Financial: Buy

The brokerage firm is bullish on HDFC seeing that the lender has consistently outclassed its peers in terms of market share, spreads, and asset quality. “While HDFC is a key beneficiary of uptick in residential sales, we expect competitive intensity to remain high. It has managed to maintain its spreads over the years though it is likely to restrict further expansion in valuation multiples despite acceleration in growth,” they said. JM Financial has a target price of Rs 3,190 per share on HDFC, implying an upside of Rs 25% upside.