HDFC Bank - Execution On Track; Marching Toward Steady Growth, Profitability: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.HDFC Bank Ltd. has everything in place to deliver strong profitability and growth trajectory over the coming years (similar to pre-merger levels) and the management believes that execution remains the most important factor for the bank. HDFC Bank is confident of sustaining the steady growth momentum and has highlighted that it has been able to maintain its incremental market share of ~16-20% despite an increase in its size. While execution at such a large scale is inherently complex, especially amid intense competition for liabilities and rates staying elevated for longer than initially thought, we expect the bank’s operating performance to recover gradually over FY25/FY26. We expect margins to recover to 3.7% by FY26E and expect improvements in cost ratios, which should enable a ~22% compound annual growth rate in pre-provision operating profit over FY24-26E, leading to return on asset/return on equity of ~2%/17% by FY26E (thus reaching back to pre-merger levels). We maintain 'Buy' with a target price of Rs 1,950 (premised on 2.7 times FY25E adjusted book value plus Rs 209 from subsidiaries)..Click on the attachment to read the full report:.Here's The Nifty Target For Next Few Sessions, According To Experts.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HDFC Bank - Execution On Track; Marching Toward Steady Growth, Profitability: Motilal Oswal

NIM recovery to be gradual; opex and credit cost remain twin levers to drive return on asset to steady ~2%

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