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Should You Buy The Stock Of HDFC Bank Ahead Of Numbers Later This Month?
HDFC Bank, like most other biggies will declare numbers for the third quarter ending Dec 31, 2021 later this month.
Should you buy the stock of HDFC Bank ahead of numbers?
According to Motilal Oswal, HDFC Bank has already declared its key business numbers. According to the brokerage firm, total advances picked up and grew 16.4% YoY (+5.1% QoQ) to Rs 12.6t. As per the bank's internal classification, Retail loans grew 13.5% YoY (+4.5% QoQ). Commercial and Rural banking continue to remain strong (up 29.5% YoY and 6% QoQ). Corporate and other Wholesale book too picked up and grew 7.5% YoY and 4.5% QoQ.
Valuations and view on HDFC Bank
According to Motilal Oswal, HDFC Bank continues to deliver strong growth above the systemic growth, resulting in market share gains. This has been led by a healthy pickup across all segments. Retail deposit trend too remains healthy, with the bank witnessing a sequential improvement in its current savings account (CASA) ratio to 47%.
"Improvement in asset mix, robust CASA growth, and strong resumption in Credit Card issuances will aid margin recovery, which has been under pressure over the past few quarters. We maintain our Buy rating with a target price of Rs 2,000 per share (3.6x Sep'23E ABV for the core bank)," the brokerage has said.
How the stock has moved?
The stock had hit a 52-week high of Rs 1725, but, has fallen to levels of Rs 1545 since. The stock is trading slightly above its 200 day moving average of Rs 1510. When compared to peers like ICICI Bank, we have seen some under performance. The results of the company are likely to be good, though retail disbursements, which have been the hallmark at the company are now either flattening or beginning to see a fall. Though Motilal Oswal has recommended a price target of Rs 2,000 on the stock, it may take a long time to achieve that target.
Disclaimer
Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
