Analysts bullish after Q3, HDFC Bank long-term ‘buy’ stock

“Results were in line with our expectation except for NIM, which remained flat QQ. We see loan revaluation gains for other private counterparts such as ICICI Bank and Axis Bank to have a major impact on NIM. Near term business strategy will focus on enabling for smooth amalgamation, hence growth in deposits and retail lending including SME/Agri will take centre-stage,” said analysts at PhilipCapital.

The regulator’s opinion on key issues (like HDFC Life stake; approval to keep HDB Fin as a subsidiary, any regulatory regime on priority/SLR/CRR etc.) will be an important event for the bank in the next 3-6 months. The brokerage house remains positive on the bank from a medium to long term perspective and has maintained its buy rating hdfc bank shares with a revised target of 1,900.

“The announced merger strategically fits into the product basket of HDFC Bank. Since gains accrue over a period, the interim period will see pressure on margins and merger-related costs in the form of cost to earnings ratios. Return on equity is expected to moderate in the near term due to the low leverage of the parent, however we expect RoA to remain at the 2% level.”

According to MK, the bank continues to report strong growth in the retail/SME segment, which we believe should support its margins amid rising cost pressures. The merger process is progressing at a fast pace, with shareholder approval; The Bank is hopeful that it will be completed ahead of schedule.

“That said, clarity on the merger structure by HDFC Life and other subsidiaries as well as the RBI remains elusive. Despite the regulatory impasse related to the merger, we believe HDFCB offers the best play on India’s consumption story and is also a good defensive bet in the current choppy waters,” the note revised while retaining its long-term buy stance. said with target value 1,925 per share.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.