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HDFC Bank looks attractive amid merger

May 27, 2023

HDFC Bank looks attractive amid merger
HDFC Bank, the largest private sector bank in the country, is poised to sustain its growth driven by technology and expanding network, while its stock may rise over 21% from the current levels, analysts said.

Brokerage firm Motilal Oswal Financial Services believes HDFC Bank appears well positioned to sustain healthy growth, supported by new initiatives, robust branch additions and expansion of digital offerings. 
 
The bank has delivered strong business growth as compared to its peers, propelled by sustained momentum in the Retail segment, along with robust growth in Commercial and Rural Banking. This has resulted in constant market share gains.
 
The management of the private lender has highlighted how the bank is getting future-ready by focusing on strengthening its digital capabilities and sustainable growth after the merger while maintaining RoA at the current level. It suggested that the merger process is on track and is expected to be completed in about five weeks. 
 
“The bank is positioning itself to capitalize on new growth opportunities in mortgage assets, higher cross-selling as customer stickiness improves, and faster growth in liabilities. Investments in branches and digital infrastructure will further support growth over the long term,” Motilal Oswal said in a note.
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