HDFC Bank: Motilal Oswal Financial Services Recommends a ‘Buy’ with Target Price of ₹1,850

Synopsis

Motilal Oswal Financial Services has issued a ‘buy’ recommendation for HDFC Bank Ltd., setting a target price of ₹1,850. The current market price of HDFC Bank is ₹1,630, indicating a potential upside. The brokerage firm highlights the bank’s resilient performance in terms of margins and asset quality despite ongoing challenges in business growth and a heightened focus on boosting liability mobilization.

Key Points:

1. Resilient Performance Amid Challenges: Despite facing headwinds in business expansion and efforts to accelerate liability mobilization, HDFC Bank has shown resilience in maintaining strong margins and asset quality.
2. Margin Improvement: Over the last two quarters, the bank has reported a 7 basis point expansion in net interest margin (NIM) to 3.47%. This growth has been driven by a deliberate shift in the asset mix and the retirement of high-cost borrowings.
3. Company Overview: Incorporated in 1994, HDFC Bank is one of India’s leading banking institutions with a market capitalization of ₹12,41,721.64 crore. It has established itself as a prominent player in the banking sector.

With strong fundamentals, consistent performance, and the potential for further growth, Motilal Oswal Financial Services remains bullish on HDFC Bank, recommending a buy with a target price of ₹1,850.