Mumbai: City launches 90-day positive trigger watch HDFC bank. The stock has underperformed both Nifty and Bank Nifty this year on the back of growth in the wake of COVID, RBI restrictions and retail asset quality stress.

Citi said most of these concerns should be addressed by the second quarter of FY22. The brokerage has increased the target price from Rs 1,800 to Rs 1,900 and retained buy rating. HDFC Bank shares.

“The issuance of new credit cards should accelerate as RBI lifts restrictions. We expect high-yield retail and SME credit growth to improve leading to higher NIMs and decline in credit costs, healthier earnings and stronger ROA (Assets). return),” City said. .

Keeping in view the better net interest margin and lower credit cost, the brokerage has raised the earnings estimates by 2% for FY22 and 3% for FY23.

“We expect HDFC Bank to deliver strong earnings growth of around 24% CAGR (compound annual growth rate) in FY21-23 and average return on equity of 18%. 3.4 times a year to stock adjusted book Trades at a forward price, with its 5-year/10-year average valuation in line,” Citi said.