For Q3FY2020, HDFC Banks PAT surged 33% yoy led by 20% yoy increase in preprovision
profit and higher other income coupled with tax benefits, which supported
profitability.Credit growth beat the industry growth rate driven by strong
retail business. The strong liability franchise and healthy capitalisation provides
earnings visibility. We value HDFC Bank using SOTP method, valuing standalone
banking business at 3.7x of FY2021 ABV and its two subsidiaries at `78/share. We
recommend a Hold on the stock, with a target price of `1,390/ share.

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