HDFC Banks’ results for the quarter were broadly in line with expectations.
While PAT growth of 15% YoY looks lower when compared to the historical
trend of HDFC Bank, given the slow down due to demonetisation the results
by HDFC can be considered decent enough. While HDFC Bank’s growth has moderated from its
historical levels, it still remains much higher than the industry rate and asset
quality has been the best in class. While in the near term the stock might range
bound, well capitalized balance sheet and superior return ratios should result in
investors sticking to the stock in the long run. At the current market price, the
bank is trading at 3.2x FY2017E ABV. We Maintain ACCUMULATE rating, on the
stock, with a target price of Rs1,375.

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