We always liked the working environment of HDFC bank as its client and see a lot of potential in the stock. Please go through below info to arrive at a rock solid decision i.e. whether to buy or sell the stock.
We expect healthy business growth of 20% CAGR over FY11-13E with a well diversified loan book (~50:50 between retail and wholesale) and strong liability franchise (CASA ratio of ~48%) • Margins will be protected at over 4% (one of the best across industry). Healthy asset quality will lead to lower credit costs
The bank commands a premium multiple of 3.8x FY13E ABV because of consistent track record of 30% YoY growth in PAT, higher margins and healthy asset quality. We expect PAT growth of 30% CAGR over.
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