by IANS |
New Delhi, April 4 (IANS) Brokerage house Motilal Oswal Financial Services has given a 'buy' call for HDFC Bank shares due to the bank's strong growth in retail and unsecured loans.
The brokerage kept the target price at Rs 2,000 as against the current market price of Rs 1,639.
Also, the HDFC Bank approving merger with HDFC Investments and HDFC Holdings will support the stock.
"Post-merger HDFC Limited will hold 41 per cent stake in HDFC Bank. This shall enable the bank to build its housing loan portfolio and enhance its existing customer base," the brokerage said.
Reacting to the merger deal, shares of HDFC and HDFC Bank rose as high as 14 per cent and 11 per cent, respectively, during the opening session on Monday.
Besides, the brokerage said HDFC Bank has reported robust loan growth in 4QFY22, led by a healthy revival in retail loans.
"The Commercial Banking and Corporate segment too saw strong traction, which will likely support growth in pre-provision operating profit (PPOP)."
PPOP is the amount of income a bank or similar type of financial institution earns in a given time period, before taking into account funds set aside to provide for future bad debts.
Further, the brokerage expects the margin trajectory to recover gradually over FY23.