Sharekhan Places Buy On Banking Stock With Revised Target Price, Likely To Give 26% Return

Renowned brokerage firm Sharekhan has placed a Buy on HDFC Bank with a revised target price of Rs 2100 apiece. The stock is showing 26% upside potential considering the given target price and the current market price of the stock. HDFC Bank is a large-cap bank. It has a market valuation of Rs 9,35,675.69 Crore.

"HDFC Bank (merged entity) is attractively positioned ahead of the new decadal investment cycle to capture a large share in the fastest-growing Indian economy. There is a strong runway for sustained growth ahead, led by large scale, strong distribution network and wider financial product suites," said Sharekhan.

Valuation - Buy with a revised Target Price of Rs. 2,100 apiece

Sharekhan said, "The investment thesis of the bank looks solid; while at the same time, we need to acknowledge that mobilisation of retail deposits remains a key monitorable to sustain healthy loan growth over the long term. The bank has a good track record of execution capabilities and has consistently delivered healthy returns in terms of ROA irrespective of economic cycles and ROE consistently above the cost of capital. Thus, we retain our Buy rating on the stock with a revised price target (PT) of Rs. 2,100. The stock currently trades at 2.5x/2.2x its FY2024E/FY2025E core BV estimates. Reappointment of the existing MD and CEO also remains key monitorable as his tenure ends in October 2023."

Key Risks

According to Sharekhan, the key risks to the Buy call would be, Slower deposit mobilisation, which could result in prolonged growth slowdown economic slowdown that can result in slower loan growth; and tech outage.

Stock Movement

The last traded share price of Rs 1673.30 apiece, down 3.20% from its previous close of Rs 1728.65 apiece. Its 52-week high is Rs 1757.80 apiece recorded on Jul 03, 2023, and its 52-week low is Rs 1338.30 apiece recorded on Jul 19, 2022.

The stock declined 0.18% in the past 1 week. It gave 4.29% positive return in the past 1 month. It gave 23.76% positive return in the past 1 year. In the past 3 years, it gave 55.77% positive return and in the past 5 years, it gave 57.61% positive return.
In 10 years, it gave 402.90% positive return.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. 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.