Buy This Large Cap Banking Stock As Shares Set to Soar, Long Term Outlook Positive: Anand Rathi

Anand Rathi remains optimistic on HDFC Bank and assigned buy call with the target price of Rs 1908 apiece. On the distribution expansion, HDFC bank has added 121 branches during the quarter and about 500 more branches are in various stages in the pipeline to be opened in the next few months. If you buy HDFC Bank stock today, you will receive 15% gain. Check key takeaways below:

1. HDFC Bank Stock Performance & Return

Stock Performance: The last trading price of the stock is Rs 1660 apiece with an intraday gain of 0.71%. The stock's 52-week high is Rs 1721 apiece and 52-week low is Rs 1271 apiece, respectively.

Return: The stock has jumped 80% in last 5-years, 31% in last 3-years, and 10% in last 1-year. In last 1-week, the shares have surged 3% and 9% in last 3-months.

2. Net Interest Income, Operating Expenses

The Net interest income for the quarter at Rs. 210 billion grew by 18.9% over prior year and 7.9% over prior quarter. The core net interest margin for the quarter was at 4.1% prior year was also at 4.1% and prior quarter was at 4%.

Based on interest earning assets, the core net interest margin was at 4.3%. Other income for the quarter, which included Fees and commission income constituting 3/4th of other income was at Rs.58 billion and grew by 17% over prior year and 8% over prior quarter. Retail constitutes approximately 93% of the fees.

The fixed and derivatives income at Rs.9.5 billion was higher by 9.3% compared to prior year. During the quarter operating expenses, which were at Rs.112.3 billion, an increase of 21% over prior year and an increase of 6.9% over prior quarter.

3. HDFC Bank Valuation

According to Anand Rathi, "HDFC Bank already had a huge opportunity with the under-penetration of banking services in the country. The proposed merger adds an entirely different dimension to the future. We believe that the runway is huge. HDFC Bank's earnings trajectory remains on track with continued growth in retail. The ongoing expansion of branch network and cards business, coupled with the merger, is expected to aid long-term growth. Nevertheless, the bank's long-term outlook remains positive. We thereby retain our BUY rating on the stock, with a revised target price of Rs. 1,908."

4. HDFC Bank About

HDFC Bank was incorporated in August 1994 in the name of HDFC Bank Limited, with its registered office in Mumbai, India. The bank commenced operations as a Scheduled Commercial Bank in January 1995. As of June 30, 2022, the Bank had a nationwide distribution network of 6,499 branches and 18,868 ATM's in 3,226 cities/towns.

Disclaimer

The stock has been picked from the brokerage report of Anand Rathi. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.