Assigning a multiple of 2.7x to HDFC’s FY24E core mortgage book, domestic brokerage
has a SoTP target price of Rs 3,205 on the stock.
“With overall improvement in asset quality (stages 2 & 3 declined across individual and corporate books), credit cost was contained at
Having fallen almost 15% in the last one year, shares of HDFC have been reeling under pressure despite the stock being a consensus buy of 22 analysts. The stock is now 18% away from its 52-week high of Rs 3,021.10.
Prabhudas Lilladher, which has raised its target price to Rs 3,000 on the stock, noted that HDFC saw a good quarter with core metrics being in-line along with better margins, strong individual loan growth and improved asset quality.
“Margins increased by 4bps QoQ and commentary suggests that NII could see better QoQ accretion as asset repricing would catch up with liabilities,” it said.
Global brokerage firm Nomura has set a target of Rs 2,850 on the stock saying that the Q2 numbers were in line and asset quality continued to improve. “HDFC continues to gain market share in core mortgages, despite the increased competitive intensity,” Nomura analyst Nilanjan Karfa said.
said HDFC continues to have a strong ‘right to win’ in its standalone mortgage business. “We have left unchanged our FY23/FY24 EPS estimate. We expect HDFC to deliver an AUM and PAT CAGR of ~14% each over FY22-24, which will translate into a core RoA/RoE of 2%/13% in FY23/FY24,” said the brokerage while giving a target price of Rs 2,900.
Kotak expects an improvement in the net interest margin (NIM) of HDFC in the second half of the financial year. “We expect growth to remain strong in the medium term. Swift transmission of rate hikes on home loans bodes well; we expect that the benefits of rate hikes will be reflected in its NIM in 2HFY23,” it said. Kotak’s target price, pegged with the swap ratio of
ahead of the merger, stands at Rs 2,940.
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