Hold HDFC Bank - TP hiked to Rs.579 - Geojit BNP Paribas Financial Services

- Hold rating on HDFC Bank is maintained with increased target price of Rs.579

- Core performance remained strong in 1QFY13. Main positives are margin expansion of 10 bps qoq to 4.3% and core fee growth of 24.6%.

- Bank has raised floating provisions by 240 crore to Rs.1680 crore.

- Earnings estimates for FY13-14 have been raised by 1-2% and included 67% of floating provisions in the book value calculation, which results in a 6% increase in the target price.

- The bank outperforms on all counts when its peers are reeling under growth and asset quality pressures.

- Though the valuation of the stock is at a premium, it can be justified by its consistent profitable performance.

- The target price is at 3.8 multiple of FY13 expected book value.

Source : Equity Bulls

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