HDFC Bank Ltd. saw loan growth across retail, wholesale, and commercial portfolios in the quarter ended March.
Also Read: HDFC Bank, HDFC Set To Merge
Here's what analysts have to say about HDFC Bank's Q4 business update...
Morgan Stanley
Maintains 'overweight' with target price Rs 1,800 apiece—an implied return of 23.98%.
Initial update points to very strong growth in loans and retail deposits and continued market share gains.
Loan growth was strong in retail and commercial, with a big surprise in corporate banking.
Deposit growth accelerated to 16.8% YoY, higher than the system.
Wholesale loan growth was strong at 11.5% QoQ. while commercial and rural loan growth rose to 30.5% YoY.
Jefferies
Reiterates 'buy' with target price at Rs 2,160—an implied return of 43.43%.
Q4FY22 pre-quarter release shows improving momentum across parameters.
Loan growth rose to 8.6% QoQ vs 5% in Q3FY22.
Improvement was visible across categories, retail, commercial and corporate.
CASA deposits rose 10% QoQ and CASA ratio improved to 48%.
Continued improvement in loan growth should reflect in top line growth soon.
Sustained growth momentum is likely to aid re-rating.
Emkay Global
Reiterates 'buy' with a target price of Rs 2,050—an implied return of 36.1%.
Bank reported higher-than-expected credit growth of 21% YoY, led by strong traction in low-margin corporate and commercial/rural banking portfolios.
Lender retained housing loans to Rs 8,100 crore on assignment from HDFC Ltd.
Deposit growth remains healthy at 17% YoY with retail deposit growth at 19% YoY
Expects NPAs to trend down for most banks, including HDFC Bank, due to better collection trends seen in retail portfolios.
The bank may decide to partially reverse some Covid contingent provisions in a bid to boost profitability.
Recent lifting of a prolonged embargo on digital initiatives and strong business growth in Q4 should have a positive rub-off on the stock.
The bank's unsecured retail loan growth should reaccelerate as the risk-aversion is receding and embargo on cards are being lifted.
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