Hold HDFC; target of Rs 2195: ICICI Direct

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ICICI Direct's research report on HDFC

HDFC reported loan growth of 13.1% YoY to Rs 406607 crore. Individual loan book which constitutes ~71% of the portfolio continue to grow at a healthy pace of 14.9% YoY at Rs 288819 crore. Growth in non-individual/ corporate portfolio slowed for 2nd consecutive quarter in a row to 8.4% YoY on back of unfavourable lending environment. Traction in individual loan book, after adding back loans sold in preceding 12 months came strong at 24% YoY.

Outlook

Given the business strength, we value the core/ standalone segment at 2.5x FY21E ABV. Rolling over to FY21E estimates, we revise our SOTP (15% discount) based target to Rs 2195/ share (earlier Rs 2050). However, given recent headwinds, we change our recommendation on the stock from BUY to HOLD.

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