HDFC Bank: Consistent Performer (Near Term Range: 990-1110)

Technically HDFC Bank (CMP: 1013) has immediate support of around 999-990 followed by 980-970 zone. Sustain below 970, it could fall to 917-903-887 zone (low probability as of now).

On the up side, it has to break above 1037 for an immediate target of 1051-1065. Consecutive closing above 1065, HDFC Bank may scale 1085-1110 zone in the short term. Sustain above 1110-1120, it may target 1150-1225-1250 in the mid to long term (FY-16).

Bottom line (Technical Trading Levels):

887-903-917-936-946-970-990-999-1025-1037-1051-1065-1085-1110

Result of HDFC Bank (published yesterday during mkt hours) is largely in line with street estimates backed by healthy loan growth & fee income along with third party products revenue (specially EQ MF) and stable asset quality (NPA).

Going ahead, its expected to continue sequential higher growth, thanks to uptick in NIM & NII, backed by increasingly expansion of its branches. With the expected revival in Indian economy, loan disbursements may be higher wrt to average industry growth rate along with stable NPA. So far, for the last two years, it is largely concentrating on retail loans & CV.

Also, there is a great possibility of unlocking value of its subsidiary by listing them (de-leverage of Insurance & Broking arm) and merger itself with housing loan giant HDFC in the coming days.

Considering all these factors and robust management, HDFC Bank is expected to continue its stellar performance in the coming quarters.

As par BG metrics of quick TF model, median valuation of HDFC Bank is around 1110 by considering its current TTM EPS of around 44. If we assume projected FWD EPS of around 54 & 70, the median value may be around 1100-1275 (FY:16-17) under the current market conditions.

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	LONG TERM	SHORT TERM	MEDIAN VALUE	200-DEMA	10-DEMA
HDFCBANK	44.1	173.55	23.43	988.76	1027.13	1007.95	946.17	1021.04

 

HDFCBANK

52.41

210

23.43

1077.90

1119.73

1098.82

946.17

1021.04

 

HDFCBANK

70.5

250

23.43

1250.16

1298.68

1274.42

946.17

1021.04