Large Cap Banking Stock To Buy As Suggested By BoB Capital Markets, Soon To Trade 1900% Ex-Dividend

Leading brokerage firm BoB Capital Markets in its recent report has assigned a "Buy" on HDFC Bank (HDFCB) for a target price of Rs 1,956/share. Given the target price, if you buy the stock at the current market price, it can fetch up to 18% from the current level.

HDFFB recommended 1900% dividend along with its Q4 results on Saturday, 15 April 2023. The record date for the declared dividend is set as Tuesday, May 16, 2023, according to the regulatory filing by the company.

HDFCB is India's largest private sector bank with a pan-India presence. It is a large-cap bank having a market capitalisation of Rs 9.26,265 crore.

Stock's Performance & Outlook

The stock is currently trading at Rs 1,659.95/share, down 0.38% from the previous close of Rs 1,666.65/share. It is trading near its 52 week high, which it hit on 17 April 2023 at Rs 1,720.share. Its 52 week low is Rs 1,271.60/share recorded on 17 June 2022.
The stock has given 5.74% positive return in 1 month. It has given 19.17% positive return in 1 year. In the past 3 years, it has given 82.68% positive return. In the past 5 years, it has given 72.09% positive return in 5 years.

Deposits outpace loan growth

According to the BoB Capital Markets, HDFCB's deposits grew 21% YoY in Q4FY23, outpacing loan growth of 17%. CASA improved 40bps QoQ to 44.4%, and higher deposit mobilisation led to a 196bps decline in CD ratio. The bank retained its focus on the high-yield retail and CRB business, wherein home and personal loans led the way in retail, and vehicle (+11% QoQ/37% YoY) and business banking drove the CRB segment.

BoB Capital Markets suggests "Buy" with a Target Price of Rs 1,943/share

The brokerage said, "We expect HDFCB to post a credit CAGR of 18.6% over FY22-FY25 with a PAT CAGR of 16.3% baking in elevated costs. Asset quality is likely to be stable over our forecast period (GNPA/NNPA 1.2%/0.3%) with a slight addition in credit cost. We maintain BUY with a revised TP of Rs 1,956 (vs. Rs 1,943), set at 3.1x FY25E ABV (vs. 3.5x) based on the Gordon Growth Model with Rs 56/sh for subsidiaries."

Disclaimer - The stock has been picked from the brokerage report of BoB Capital Markets. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.