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.
Axis Securities Report
HDFC Bank - Buy, target price Rs 2,025
Recommendation Rationale
HDFC Bank Ltd. has re-iterated its stance of reducing its loan-to-deposit to pre-merger levels of mid-to-high 80%. Credit growth slowdown is imperative and the management highlighted that credit growth in FY25E would be below systemic growth. It would pick up in FY26E and be largely in line with systemic growth before accelerating in FY27E.
Thus, the bank aims to reduce its LDR to high-80% over the next two-three years. We factor in a slower credit growth of ~12% CAGR over FY24-27E versus a deposit growth of ~17% CAGR over the same period, thereby enabling HDFC Bank to bring down its LDR to ~90-91% by FY27E.
Bajaj Finance - Buy / target price Rs 7,655
Recommendation Rationale
The near-term challenges on asset quality persist and remain a key monitorable. However, supported by a robust distribution reach facilitating customer growth; omni-channel strategy augmenting market positioning; and diversified portfolio with strong growth in the core products with incremental growth contributed by new business lines, we believe Bajaj Finance Ltd. remains well-placed to steer strong growth over the medium term, alongside maintaining healthy asset quality.
Given expectations of net interest margins stabilizing, improving operational efficiency enabling cost ratio improvement and gradually improving credit costs, we expect Bajaj Finance to deliver a healthy RoA/RoE of 4.4-4.5%/19-22% over FY25-27E.
Click on the attachment to read the full report:
Also Read: Automobiles Sector Update - Two-Wheelers Continue To Outperform Passenger Vehicles: Motilal Oswal
DISCLAIMER
This 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.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
Stocks To Buy: Experts Weigh In On HDFC Life, Bajaj Finserv, Federal Bank Shares
Nov 11, 2024
Indian Lenders’ Margins Hurt By Rising Credit Costs As Rate Cut Hopes Fade
Oct 21, 2024
HDFC Bank Q2 Results - IDBI Capital Maintains 'Buy' Rating On The Stock, Revises Target Price; Here's Why
Oct 21, 2024
Nifty, Sensex Trade Lower As HDFC Bank, Bajaj Auto Fall: Midday Market Update
Oct 17, 2024
POPULAR