This Large Cap Private Sector Bank Is Top Pick By KR Choksey, Suggests Buy For 22% Upside

KR Choksey picks HDFC Bank Ltd (HDFCB) as its top pick in April with "Buy" call with a target price of Rs 1,960 apiece. If you buy the stock at the current market price it can fetch you up to 22% potential upside from its current level. HDFCB is a large-cap private sector bank having a market capitalisation of Rs 8,98,164 crore. Check below to know more:

Stock's Current Market Price, 52-Week Low/High, and Returns

The last traded share price of HDFCB is Rs 1,610.55 apiece. Its 52 week high is Rs 1,7221.0 apiece, and 52 week low is Rs 1,271.60 apiece, respectively. It gave 2.75% positive return. However, it has fallen 0.33% in the past 1 month and 1.76% in the past 3 months, respectively. It gave 6.94% positive return in 1 year, 97.89% in 3 years and 68.12% in 5 years, respectively.

Merger synergies to pan-out soon

According to the brokerage firm, The complementing strengths of HDFCB and will be combined, post completion of the merger. The subsidiaries/ associates of HDFC Ltd will become a part of HDFCB, which opens up a cross-selling opportunity for the bank through these subsidiaries. Mortgages will be accessible to HDFCB customers as a core product. The mortgage business model is a more profitable segment owing to the lower cost of funds. With HDFC's leadership in the housing loan sector, HDFCB will be able to provide its customers with flexible mortgage products cost-effectively. Thus, the merger is expected to strengthen HDFCB's capital base and enhance its balance sheet.

Buy for a Target Price of Rs 1,960 apiece

"We maintain our target price at INR 1,960 per share, implying a P/ABV multiple of 3.2x to the adjusted book value of INR 612 per share for FY25E, showing an upside of 21.7% over the CMP. Accordingly, we reiterate our BUY rating on the shares of HDFC Bank Ltd," KR Choksey has said.

About - HDFC Bank Ltd.

HDFC Bank Ltd (HDFCB) has been a consistent player in terms of healthy business growth, focusing on new initiatives and maintaining superior asset quality. As on 31st December 2022, the bank's total balance sheet size stood at INR 22890.8 Bn. HDFCB is identified as a Domestic Systemically Important Bank (D-SIB) as per the RBI.

Disclaimer - The stock has been picked from the brokerage report of KR Choksey. 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.