HDFC - Buy Stock From Banking Sector - Result Update

Buy Stock research report from stock research firms based on analysis of latest results. Provides revised target price.


Mkt Cap 44,133.59
P/E 19.04
Div 250.00
* EPS (TTM) 81.47
B/V: 420.03
Mkt Lot 1.00
FV 10.00
CMP: RS 1388
Target: Rs 1980

Bank of America cuts HDFC’s target pric for 2009 to Rs 1,980 from Rs 2,450 owing to lower sum of parts value and factoring in moderation in growth. However, the stock can still trade at 2.5-3.0x FY10E given the comfort in asset quality; earnings growth of 16-17% through FY10-11E and ROE (return on equity) of 29% on its core business.

CHECKOUT: HDFC - Best stock to invest in Banking sector

HDFC’s 3QFY09 earnings were down 2% y-o-y and 4-5% lower than market estimates. This was primarily due to the absence of Rs 100 crore of high investment gains and extraordinary income and Rs 50 crore of exchange losses booked by HDFC in its convertible bond. Adjusting for these factors, both topline and pre-tax earnings grew by about 19% y-o-y. The other disconcerting feature was the 8% contraction in approvals - which appears to be a more conscious decision, as HDFC had been reluctant to lend in October-November ‘08 as conditions worsened. Bank of America has cut the FY09-10 reported earnings by 6-11% to capture the lower investment gains.

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