Motilal Oswal Maintains Buy On Large Cap Banking Stock, Sees 22% Strong Upside

Motilal Oswal maintains a Buy rating on HDFC Bank (HDFCB) in its recent equity report. The brokerage assigns a target price of Rs. 1950 apiece on the stock of HDFCB. Considering the given target price, and the current market price (CMP), the stock is likely to give potential gains of 22% if purchased at CMP.

HDFCB is India's largest private sector bank with presence across the nation. With a market valuation of Rs. 8,98,115 crore, it is a large-cap banking stock.

Valuation and view

According to Motilal Oswal, HDFCB appears well positioned to sustain healthy growth, supported by new initiatives, robust branch additions and expansion of digital offerings. It has delivered strong business growth v/s peers, resulting in constant market share gains. This was propelled by sustained momentum in the Retail segment, along with robust growth in Commercial and Rural Banking. Asset quality ratios remain robust, while the restructured book has moderated to 31bp of loans. Healthy PCR and a contingent provisioning buffer should support asset quality. "We estimate HDFCB to deliver a ~19% PAT CAGR over FY23-25, with RoA of ~2%. HDFCB remains one of our preferred picks and we maintain our Buy rating with a TP of INR1,950 (3.0x Sep'24E ABV)," the brokerage has said.

Stock Overview - Market Price & Returns

On Thursday, the stock of HDFCB last traded at Rs. 1609.60 apiece, down 0.38% from its previous close of Rs. 1615.80 apiece. Its 52 week low is Rs. 1271.60 apiece and its 52-week high is Rs. 1734.45 apiece, respectively.

The stock gave 2.15% negative return in 1 week, and 3.28% in 1 month, respectively. It gave 21.13% positive return in 1 year, and 91.88% in 3 years, respectively. In 5 years, it has given 60.26% positive return.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. 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 consult with certified experts before making any investment decision.