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HDFC Bank: Healthy Operational Performance Justifies Premium

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HDFC Bank (HDFBAN)

CMP: | 1262 Target: | 1550 (23%) Target Period: 12 months BUY


January 20, 2020

Healthy operational performance justifies premium


NII came in at | 14173 crore led by healthy growth in advances. Margins
were steady at 4.2% due to slower growth in high yielding book & higher
accretion in term deposit. Other income growth continued to remain robust

Result Update
at 35.5% YoY to | 6669 crore, led by 24% YoY growth in fee income &
treasury income of | 940 crore. Led by healthy growth in NII and other
income, PPP came in at | 12945 crore, up 20% YoY. However, provisions Particulars
continued to remain elevated at | 3043 crore, consisting of ~| 2884 crore of Particulars Amount
specific provision. Healthy operational performance coupled with reduction Market Capitalisation | 690105 crore
GNPA (Q3FY20) | 13427 crore
in tax rate led to healthy 32.8% YoY growth in earnings to | 7416 crore.
NNPA (Q3FY20) | 4468 crore
Advances growth came in healthy at 19.9% YoY to | 936030 crore. Traction NIM % (Q3FY20) 4.2
in the retail book remained slower at 14% YoY, primarily led by subdued 52 week H/L 1304/1011
growth in the auto book while growth in unsecured book (personal and Networth | 163591 crore
Face value |2
credit cards) was healthy at ~25% YoY. Corporate book grew at a faster rate
DII holding (%) 20.9
at 27% YoY, offsetting a moderation in retail book. Deposit growth was
FII holding (%) 37.9
healthy at 25% YoY to | 1067433 crore, led by strong growth of ~28% YoY
in term deposit. CASA saw higher growth compared to the previous quarter
Key Highlights
leading to ~20 bps uptick in CASA ratio sequentially to 39.5%.
 Earning outperformance largely
Asset quality continued to remain steady with GNPA at | 13427 crore and
attributable to robust other income
GNPA ratio at 1.42%, up 4 bps QoQ. Marginal pressure was witnessed in the
growth
auto book, though currently it is not a major concern. Overall slippages

ICICI Securities – Retail Equity Research


came in at | 3839 crore with |1500 crore being lumpy, | 700 crore from a  Recovery includes ~| 200 crore as
stressed corporate and 60-65% slippages came from agri book. recovery from resolution of NCLT case

Among large subsidiaries, for HDB Financial, growth continues to remain  Maintain our BUY recommendation
slower, as AUM grew ~15% YoY to | 59178 crore. Stage 3 GNPA ratio with revised target price of | 1550
remained steady at ~3%, led by pressure in commercial vehicle segment. (earlier | 1440)

To maintain advances growth with adequate asset mix


The bank has been stepping up advances growth in the corporate as well as
non-auto retail portfolio in order to maintain advances growth of 20% YoY.
Accordingly, we upgrade our advances & deposit estimates to ~20%, 21%
& 21%, 22% for FY20E and for FY21E to | 983066, 1184790 crore, | 1116849, Research Analyst
| 1358369 crore, respectively. Kajal Gandhi
kajal.gandhi@icicisecurities.com
Valuation & Outlook
Vishal Narnolia
Due to its focus, the bank has been able to maintain its leadership in retail vishal.narnolia@icicisecurities.com
loans with a slew of festive treats offer. Further, they have also stepped up Harsh Shah
corporate loans to offset the slowdown in the auto sector. The selection of shah.harsh@icicisecurities.com
the new MD continues to remain an overhang on the stock. The bank
continues to remains a portfolio stock and maintains premium valuations.
Accordingly, we maintain our BUY recommendation with a revised target
price of | 1550 (earlier | 1440) valuing the bank at ~20x FY22E EPS (3.7x
FY22E ABV) and include | 75 per share for HDB Financial Services.

Key Financial Summary


| Crore FY18 FY19 FY20E FY21E FY22E CAGR (FY19-21E)
NII 40,095 48,243 55,963 63,165 73,036 15%
PPP 32,630 39,750 48,263 56,254 67,706 19%
PAT 17,487 21,078 26,837 33,712 41,472 25%
ABV (|) 199.8 267.1 305.6 354.1 395.4
P/E 38.1 33.2 26.1 20.8 16.9
P/ABV 6.4 4.8 4.2 3.6 3.3
RoA 1.8 1.8 2.0 2.1 2.1
RoE 17.9 16.5 16.8 18.3 19.8
ss

Source: Company, ICICI Direct Research


Result Update | HDFC Bank ICICI Direct Research

Exhibit 1: Variance Analysis


Q3FY20 Q3FY20E Q3FY19 YoY (%) Q2FY20 QoQ (%) Comments
NII continues to remain steady on the back of healthy credit
NII 14,173 14,410 12,577 12.7 13,515 4.9
growth & stable margins
Slower growth in high yielding auto loans and higher
NIM (%) 4.2 4.2 4.3 10 bps 4.2 0.0
accretion in term deposit
Healthy core fee income growth of 24% YoY & treasury
Other Income 6,669 5,775 4,921 35.5 5,589 19.3
income of | 950 crore led to superior other income

Net Total Income 20,842 20,184 17,498 19.1 19,104 9.1


Staff cost 2,455 2,282 1,968 24.8 2,355 4.2
Other Operating Expenses 5,442 5,521 4,752 14.5 5,051 7.7

PPP 12,945.4 12,380.1 10,778.4 20.1 11,698 10.7 PPP beat on back of higher other income
Slippages came in higher at | 3839 crore. Further, the bank
Provision 3,043.6 2,988.8 2,211.5 37.6 2,700.7 12.7
has made specific provisions of | 2884 crore
PBT 9,901.9 9,391.3 8,566.9 15.6 8,997.4 10.1
Tax 2,485.4 2,441.7 2,981.0 -16.6 2,652.4 -6.3
PAT 7,416.5 6,949.6 5,585.9 32.8 6,345.0 16.9 PAT trajectory maintained largely due to robust other income

Key Metrics
Slippages came in higher at | 3839 crore including | 700
GNPA 13,427.3 13,208.2 10,902.9 23.2 12,508.2 7.3
crore from corporate sector
NNPA 4,468.4 4,191.0 3,301.5 35.3 3,791.0 17.9
Total Restructured assets 898.6 861.1 749.7 19.9 861.1 4.4
Corporate book grew 27% YoY while slowdown in auto kept
Advances 936,030 934,000 780,951 19.9 896,984 4.4
retail advances growth at 14% YoY
CASA ratio improved ~20 bps QoQ to 39.5%, led by higher
Deposits 1,067,433 1,067,500 852,502 25.2 1,021,615 4.5
accretion in savings deposit
Source: Company, ICICI Direct Research

Exhibit 2: Change in estimates


FY20E FY21E FY22E Comment
(| Crore) Old New % Change Old New % Change Introduced
Net Interest Income 55,865.5 55,963.3 0.2 63,463.3 63,165.0 -0.5 73,035.6
Pre Provision Profit 46,201.2 48,262.7 4.5 51,691.7 56,253.5 8.8 67,706.2
Higher dependence on term deposit and liquidity
NIM calculated (%) 4.3 4.4 5 bps 4.2 4.2 -1 bps 4.1
to keep margins under pressure
PAT 25,955.7 26,837.3 3.4 30,914.7 33,711.9 9.0 41,471.9
ABV (|) 303.1 305.6 0.8 349.3 354.1 1.4 395.4
Source: Company, ICICI Direct Research

Exhibit 3: Assumption
Current Earlier
FY19 FY20E FY21E FY22E FY20E FY21E
Credit growth (%) 24.5 20.0 20.5 22.0 19.0 20.8
Deposit Growth (%) 17.0 21.0 21.6 22.4 16.9 19.2
CASA ratio (%) 42.4 40.0 38.7 37.4 41.3 40.9
NIM Calculated (%) 4.4 4.4 4.2 4.1 4.5 4.5
Cost to income ratio (%) 39.7 38.6 38.8 38.4 38.4 38.3
GNPA (| crore) 11,479 14,723 17,567 21,614 13,820 15,586.5
NNPA (| crore) 3,745 4,209 4,778 6,344 4,510 4,763.2
Slippage ratio (%) 1.1 1.0 1.0 1.0 1.0 0.9
Credit cost (%) 0.9 1.1 0.9 0.8 0.9 0.8
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 2


Result Update | HDFC Bank ICICI Direct Research

Story in Charts
Exhibit 4: Momentum in NII growth continues
16000 30
14000 25
12000
10000 20
(| Crore)

8000 15 (%)
6000 10
4000
2000 5
0 0
Q1FY16
Q2FY16
Q3FY16
Q4FY16
Q1FY17
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY20
Q2FY20
Q3FY20
NII NII growth YoY (RHS)

Source: Company, ICICI Direct Research

Exhibit 5: Breakup of retail credit


| crore Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20
Auto 69,053 73,057 76,427 77,659 80,336 83,012 80,675 80,784 80,784 83,552
CVCE 20,252 21,403 23,391 24,852 25,508 27,166 28,730 28,490 28,490 28,124
Two wheelers 6,883 7,691 8,672 9,227 9,689 10,095 10,047 9,851 9,851 10,149
Personal loans 60,692 66,817 71,876 77,868 83,426 88,803 92,978 1,02,080 1,02,080 1,09,531
Business Banking 45,528 46,989 54,126 52,050 54,180 55,706 57,035 62,689 62,689 63,255
LoansAgainst Security 1,604 1,671 1,816 1,748 1,824 1,788 1,881 1,828 1,828 1,812
Credit cards 30,831 33,622 36,115 38,458 40,535 44,839 46,630 52,043 52,043 57,678
Home loans 40,015 38,129 36,257 44,021 47,861 51,786 51,359 60,017 60,017 61,729
Others 44,422 44,929 48,744 49,473 52,947 52,544 56,836 57,543 57,543 58,985
Gold 5,068 5,057 5,065 5,116 5,193 5,161 5,187 5,320 5,320 5,318
Total 3,24,348 3,39,365 3,62,489 3,80,472 4,01,499 4,20,900 4,31,358 4,60,645 4,60,645 4,80,133
Source: Company, ICICI Direct Research

Exhibit 6: Credit, deposit growth above industry, moderation seen in auto


45

35 27.5 26.6 25.9


24.1 23.7 24.5
22.3 22.0 20.5 22.0
25 18.7 19.5 31.0 20.0
(%) 13.3 26.8
15 22.5 20.9 22.0 22.6 21.0 21.6 22.4
20.0
16.5 17.5 17.0
5 10.1

-5
FY18

FY19

FY20E

FY21E

FY22E
Q2FY18

Q3FY18

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q1FY20

Q2FY20

Q3FY20

Advances growth YoY Deposit growth YoY

Source: Company, ICICI Direct Research

Overall slippages came in at | 3839 crore with |1500 crore being lumpy, |
600-700 crore from a stressed corporate and 60-65% slippages came from
agri book. The bank holds floating provision at | 1450 crore.

ICICI Securities | Retail Research 3


Result Update | HDFC Bank ICICI Direct Research

Exhibit 7: CASA ratio inches up ~20 bps QoQ…. Exhibit 8: Continued focus on branch expansion
1100000 46
1000000 Q3FY20 5345 14533
44 43 44 Q2FY20 5314 13514
900000 43
800000 42 42 42 Q1FY20 5314 13514
700000 41 40 40 40 Q4FY19 5103 13160
39 39 40
(| Crore)

600000 39 Q3FY19 4963 13160


37 38
500000 (%) Q2FY19
400000 36 4825 13018
300000 Q1FY19 4727 12808
34
200000 Q4FY18 4787 12635
100000 32 Q3FY18 4734 12333
0 30 Q2FY18 4729 12259
FY18

FY19

FY20E
FY21E
FY22E
Q2FY18
Q3FY18

Q1FY19
Q2FY19
Q3FY19

Q1FY20
Q2FY20
Q3FY20
Q1FY18 4727 12220
100 2100 4100 6100 8100 10100 12100
Saving Current Term CASA (RHS) Branches ATM

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

Exhibit 9: Margin to see marginal pressure ahead Exhibit 10: Best in class asset quality maintained
5.0

4.8 1.5 1.5 1.5


1.6 1.4 1.4 1.4 1.4 1.4
1.2 1.3 1.3 1.3 1.3 1.3
4.6 1.4
1.1 1.1
1.2 1.0
4.4 1.0
(%) 4.4 4.4 (%) 0.8
4.2 4.3 4.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.4 0.4 0.4
4.3 4.3 4.3 4.3 4.3 0.6 0.3 0.3 0.3
4.2 4.2 4.2 4.2 4.2 0.4
4.0 4.1 0.2
0.0
3.8

FY20E
FY21E
FY22E
Q2FY17
Q3FY17
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY20
Q2FY20
Q3FY20
3.6
FY19
Q4FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19

Q1FY20
Q2FY20
Q3FY20
FY20E
FY21E
FY22E

GNPA Ratio NNPA Ratio

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

Exhibit 11: Adequately capitalised for future growth

21.0 18.5
19.0 17.1 17.3 17.1 17.5 17.5
17.0 15.5 15.5 15.4 15.9 15.6 15.1 15.5
14.8 14.6
14.6
15.0 17.1
(%) 13.0 15.6 15.8 15.8 16.2 16.2
11.0 13.2 13.3 13.3 13.8 12.8 13.6 13.3 13.6 13.2
9.0 11.0
7.0
5.0
Q4FY16

Q1FY17

Q2FY17

Q3FY17

Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

Q1FY20

Q2FY20

Q3FY20

CAR Tier 1

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 4


Result Update | HDFC Bank ICICI Direct Research

Exhibit 12: Non interest income contributes ~27% of total income

5000 6669 8000


5589 5589 7000
4000 4016 4921 4871
4229 3818 6000
3000 3517 3606 3869
3446 5000

(| Crore)
2000 4000
1000 ` 3000
2000
0 1000
-1000 0
Q4FY17

Q1FY18

Q2FY18

Q3FY18

Q4FY18

Q1FY19

Q2FY19

Q3FY19

Q4FY19

Q1FY20

Q2FY20

Q3FY20
Commission Forex Revaluattion of Investment Total (RHS)

Source: Company, ICICI Direct Research

Exhibit 13: Return ratio trend to stay abated

2.5 21.28 25.0


20.34 19.37 19.8
18.69 18.26 18.3
2.0 17.95 17.87 16.8 20.0
16.31 16.75 16.8

1.5 15.0

1.0 10.0

0.5 5.0
1.45

1.57

1.68

1.82

1.90

1.89

1.85

1.81

1.81

1.97

1.97

2.08

2.14
0.0 0.0
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E

RoA % RoE %

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 5


Result Update | HDFC Bank ICICI Direct Research

Exhibit 14: Recommendation History vs. Consensus


1,600 95.0
1,400 94.0
1,200
93.0
1,000
(|) 92.0
800 (%)
91.0
600
90.0
400
200 89.0

0 88.0
Sep-17

Sep-18

Sep-19
Dec-17

Dec-18

Dec-19
Feb-17

Feb-18

Feb-19
Jan-19

Jan-20
Jan-17

Jan-18
Jun-17

Jun-18

Jun-19
Oct-17

Oct-18

Oct-19
May-17

Jul-17

Jul-18

Jul-19
May-18

May-19
Aug-17

Nov-17
Nov-17

Aug-18

Nov-18

Aug-19

Nov-19
Mar-17

Mar-18

Mar-19
Apr-17

Apr-18

Apr-19
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Bloomberg, Company, ICICI Direct Research

Exhibit 15: Top 10 Shareholders


Rank Latest Filing Date % O/S Position Position Change Change (m)
1 HOUSING DEVELOPMENT 30-06-2019 15.79 864.62M +864.62M
2 CAPITAL GROUP COMPAN 31-10-2019 6.97 381.76M -13.82M
3 SBI FUNDS MANAGEMENT 31-12-2019 2.81 153.69M +3.90M
4 50 SBI-ETF NIFTY 30-06-2019 2.35 128.54M +19.83M
5 LIFE INSURANCE CORP 30-06-2019 2.04 111.63M +2.96M
6 FIL LIMITED 14-01-2020 1.22 66.84M -5.93M
7 ICICI PRUDENTIAL LIF 30-06-2019 1.07 58.72M -2.78M
8 HDFC ASSET MANAGEMEN 31-12-2019 1.05 57.26M -3.94M
9 RELIANCE CAPITAL TRU 31-12-2019 1.03 56.54M -0.71M
10 REPUBLIC OF SINGAPOR 43646 1.01 55.56255 55.56255
Source: Reuters, ICICI Direct Research

Exhibit 16: Shareholding Pattern


(in %) Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Promoter 26.5 26.5 26.3 26.3 26.2
FII 38.7 38.7 38.6 41.0 37.9
DII 16.0 16.4 16.9 17.7 20.9
Others 18.8 18.4 18.3 15.1 15.0
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 6


Result Update | HDFC Bank ICICI Direct Research

Financial summary

Exhibit 17: Profit and loss statement | crore Exhibit 18: Key Ratios
(Year-end March) FY19 FY20E FY21E FY22E (Year-end March) FY19 FY20E FY21E FY22E
Interest Earned 98972 115895 136539 162280 Valuation
Interest Expended 50729 59932 73374 89245 No. of Equity Shares 544.7 544.7 544.7 544.7
NII 48243 55963 63165 73036 EPS (|) 38.7 49.3 61.9 76.1
Growth (%) 20.3 16.0 12.9 15.6 BV (|) 273.9 313.4 362.9 407.0
Non Interest Income 17626 22662 28758 36837 ABV (|) 267.1 305.6 354.1 395.4
Fees and advisory 13806 17947 23331 30331 P/E 33.2 26.1 20.8 16.9
Treasury Income 387 464 557 669 P/BV 4.7 4.1 3.5 3.2
Other income 3433 4251 4870 5837 P/ABV 4.8 4.2 3.6 3.3
Total Income 65869 78626 91923 109872 Yields & Margins (%)
Employee cost 7762 8735 10003 11501 Net Interest Margins 4.4 4.4 4.2 4.1
Other operating Exp. 18358 21628 25667 30665 Yield on avg earning assets 9.0 9.0 9.1 9.1
Gross Profit 39750 48263 56254 67706 Avg. cost on funds 5.2 5.3 5.4 0.0
Provisions 7550 10989 11003 12039 Avg. cost of deposits 5.1 5.2 5.3 5.4
PBT 32199 37274 45251 55667 Yield on average advances 10.5 10.4 10.3 10.3
Taxes 11121 10437 11539 14195 Quality and Efficiency (%)
Net Profit 21078 26837 33712 41472 Cost / Total net income 39.7 38.6 38.8 38.4
Growth (%) 20.5 27.3 25.6 23.0 Credit/Deposit ratio 88.8 88.0 87.2 86.9
EPS 38.7 49.3 61.9 76.1 GNPA 1.4 1.50 1.48 1.50
Source: Company, ICICI Direct Research NNPA 0.5 0.43 0.40 0.44
ROE 16.5 16.8 18.3 19.8
ROA 1.8 2.0 2.1 2.1
Source: Company, ICICI Direct Research

Exhibit 19: Balance sheet | crore Exhibit 20: Key ratios (%)
(Year-end March) FY19 FY20E FY21E FY22E (Year-end March) FY19E FY20E FY21E FY22E
Sources of Funds Total assets 17.0 18.6 19.4 19.8
Capital 545 545 545 545 Advances 24.5 20.0 20.5 22.0
Reserves and Surplus 148662 170131 197101 221155 Deposits 17.0 21.0 21.6 22.4
Networth 149206 170676 197646 221699 Total Income 22.1 18.8 19.3 20.5
Deposits 923141 1116849 1358369 1663160 Net interest income 20.3 16.0 12.9 15.6
Borrowings 117085 125887 135479 145911 Operating expenses 15.1 16.2 17.5 18.2
Other Liabilities & Provisions 55108 62333 70700 80412 Operating profit 21.8 21.4 16.6 20.4
Total 1244541 1475745 1762193 2111182 Net profit 20.5 27.3 25.6 23.0
Net worth 40.4 14.4 15.8 12.2
Applications of Funds EPS 14.9 27.3 25.6 23.0
Source: Company, ICICI Direct Research
Fixed Assets 4030 4209 4414 4649
Investments 290588 317275 349938 388374
Advances 819401 983066 1184790 1445386
Other Assets 49174 81988 124773 163999
Cash with RBI & call money 81348 89207 98277 108774
Total 1244541 1475745 1762193 2111182
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 7


Result Update | HDFC Bank ICICI Direct Research

Exhibit 21: ICICI Direct coverage universe (BFSI)


CMP M Cap EPS (|) P/E (x) P/ABV (x) RoA (%) RoE (%)
Sector / Company
(|) TP(|) Rating (| Bn) FY19FY20E FY21E FY19FY20E FY21E FY19 FY20E FY21E FY19FY20E FY21E FY19FY20E FY21E
BoB (BANBAR) 96 130 Buy 443 1.8 5.0 18.0 53.6 19.1 5.3 1.2 1.0 0.8 0.1 0.2 0.6 0.9 2.9 9.4
SBI (STABAN) 315 400 Buy 2814 1.0 18.4 31.1 325.1 17 10.1 2.2 1.7 1.5 0.0 0.5 0.7 0.5 8.5 12.5
Indian Bank (INDIBA) 102 130 Buy 62 6.7 21.7 40.1 15.2 4.7 2.5 0.5 0.4 0.4 0.1 0.3 0.6 1.7 5.3 9.3
Axis Bank (AXIBAN) 730 865 Buy 2057 18.2 21.3 49.0 40 34.2 14.9 3.4 2.6 2.3 0.6 0.7 1.4 0.6 0.7 1.4
City Union (CITUNI) 240 240 Buy 177 9.3 10.4 12.0 25.9 23.1 20.0 4.1 3.5 3.0 1.6 1.6 1.6 15.3 14.8 14.8
DCB Bank (DCB) 201 220 Buy 62 10.5 12.6 16.7 19.1 15.9 12.0 2.3 2.1 1.8 1.0 1.0 1.2 12.2 12.9 14.8
HDFC Bank (HDFBAN) 1,261 1,550 Buy 6907 38.7 49.3 61.9 32.6 25.6 20.4 4.7 4.1 3.6 1.8 2.0 2.1 16.5 16.8 18.3
IndusInd Bank (INDBA) 1,343 1,700 Buy 931 60.9 80.3 107.5 22.0 16.7 12.5 3.2 2.6 2.2 1.6 1.8 2.1 14.5 16.4 18.4
J&K (JAMKAS) 30 48 Hold 16 8.3 9.4 14.5 3.5 3.1 2.0 0.5 0.5 0.4 0.5 0.5 0.6 7.3 7.7 11.0
Kotak Bank (KOTMAH) 1,681 1,700 Hold 3213 25.5 33.7 39.8 65.9 49.9 42.3 7.8 6.9 6.0 1.7 1.9 1.9 12.1 14.0 14.4
Bandhan (BANBAN) 483 650 Buy 778 16.4 21.4 27.1 2.4 1.8 1.4 0.4 0.4 0.4 3.9 4.6 4.1 19.0 26.5 25.9
IDFC First (IDFBAN) 43 54 Buy 207 -3.4 -2.3 1.1 -12.6 -18.8 38.4 1.2 1.3 1.3 -1.1 -0.6 0.3 -9.8 -6.2 3.1
Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 8


Result Update | HDFC Bank ICICI Direct Research

RATING RATIONALE
ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock
Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,


ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

ICICI Securities | Retail Research 9


Result Update | HDFC Bank ICICI Direct Research

ANALYST CERTIFICATION
I/We, Kajal Gandhi, CA, Vishal Narnolia, MBA and Harsh Shah, MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our
views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above
mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in
the report.

Terms & conditions and other disclosures:


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Recommendation in reports based on technical and derivative analysis centre on studying charts of a stock's price movement, outstanding positions, trading volume etc as opposed to focusing on a company's fundamentals and, as
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ICICI Securities | Retail Research 10

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