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Buy HDFC Bank, target price Rs 1,150: Motilal Oswal

The brokerage expects overall loan growth over FY21 to be affected due to the lockdown. Also, the appointment of a new CEO is a huge event.

ETMarkets.com|
Last Updated: Apr 08, 2020, 08.04 AM IST
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Motilal Oswal has a buy rating on HDFC Bank with a target price of Rs 1,150. The stock ended up10.2 per cent at Rs 896.35 on Tuesday while the BSE sensex closed 2476.26 points up (+8.97 per cent) at 30,067.21.

HDFC Bank Ltd., incorporated in 1994, has a market cap of Rs 491494.38 crore.

Investment Rationale

HDFC Bank's business growth remains robust in a tough environment, where economic activity is being impacted due to the Covid-19 outbreak, which kept lending activity muted in the last few days of March 2020. The brokerage expects overall loan growth over FY21 to be affected due to the lockdown. The appointment of a new CEO is a huge event, the brokerage said.

Financials

HDFC Bank's key products/revenue segments include Interest & Discount on Advances & Bills which contributed Rs 77544.19 crore to sales value (78.34 per cent of total sales); Income From Investment which contributed Rs 19997.46 crore to sales value (20.20 per cent of total sales) and Interest which contributed Rs 794.70 crore to sales value (0.80 per cent of total sales)for the year ending March 31, 2019.
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