Merger with HDFC to boost cost-income ratio of India's HDFC Bank - Bernstein

Housing Development Finance

28/06/2023 07:03

** Bernstein says merger of India's HDFC Bank  HDBK.NS  with
HDFC  HDFC.NS  would have an immediate positive impact on HDBK's
cost-to-income ratio, dropping it to 36% from 40% currently
    ** Says trajectory from there will require normalisation of
funding costs and a scale-led decline in opex to assets ratio;
expects opex to assets ratio to drop to 1.7% from current 2.1%
    ** Reiterates 'outperform' rating with PT of 2,300 rupees
for HDBK
    ** Shares of HDFC Bank rise as much as 0.8% to 1,672.00
rupees
    ** The stock has a weightage of 8.73% in the Nifty 50
 .NSEI  index and HDFC has a weightage of 5.88%
    ** Nifty and Sensex  .BSESN  hit fresh record highs on
Wednesday
    ** Nearly 7.8 mln shares change hands as of 11:30 a.m. IST,
~0.6x the 30-day avg
    ** Avg rating of 37 analysts equivalent of 'buy;' median PT
is 1,964.00 rupees - Refinitiv data
    ** Stock up 1.9% YTD as of last close

 (Reporting by Varun Vyas in Bengaluru)
 ((varunvyas.hebbalalu@thomsonreuters.com))