'Add' HDFC Bank Shares Maintains Dolat Capital Post Inline Q1 Results, Hikes Target Price — Here's Why

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Dolat Capital Report

HDFC Bank Ltd. stands out for its strong execution and industry-best credit costs. Increased contingent provision at 1.4% of advances (highest amongst peers) provides additional comfort.

However, given the LDR constraints post-merger, growth trends could remain lower relative to large private peers over the medium term.

Nonetheless, with likely normalisation in credit environment, valuation premium vs peers should strengthen. Improvement in liquidity environment also works in favor of the bank given its large deposit requirement vs peers.

We value the standalone bank at 2.5x FY27E price/adjusted book value (from 2.4x earlier).

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