HDFC Bank Q4 profit misses estimates: Here’s what brokerages have to say.

A good performance amidst uncertainty.

India’s largest private sector Bank viz., HDFC Bank, reported a net profit of Rs 8,186.3 for the fourth quarter for the fiscal year 2021 as compared to Rs 6,927.6 crore in the previous year. Its net profit inched 18.2 percent higher YoY, yet remained below estimates of Rs 8,443 crore. Brokerages remained bullish on the lender even as profit missed analysts’ estimates. Morgan Stanley and JPMorgan are ‘overweight’ while CLSA has a ‘buy’ call. Here’s what brokerages have to say:

Morgan Stanley on HDFC Bank: The brokerage is ‘overweight’ on the stock with a target at Rs 2,000 per share. It expects sustained market share gains and a further rise in profitability as the cycle turns for HDFC Bank.

Credit Suisse on HDFC Bank: The brokerage maintains an ‘outperform’ call on the stock with a target at Rs 1,700 per share. It raised FY22/23 earnings by 4 percent/1 percent on slightly lower credit costs. Growth and profitability remain ahead of peers, added CS.

JPMorgan on HDFC Bank: The brokerage maintains an ‘overweight’ call on the stock with a target at Rs 1,800 per share. It noted that the core performance remains robust and expects EPS growth at 10 percent over FY20-23.

CLSA on HDFC Bank: The brokerage maintains a ‘buy’ call on the stock with a target at Rs 1,825 per share. It believes the company’s portfolio has remained pandemic proof.

Our view:

This Private sector Bank has strong fundamentals although due to various external factors the performance figures may show a small decline against estimates (still has done well with 18.2 % increase YoY)but in the medium and long term this counter will provide substantial valuations and hence investors may look into this investment for a long term benefit.

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