HDFC shares steady; Deutsche Equities cuts price target

MUMBAI: HDFC shares were trading steady at Rs 1,383, up 0.8% over the previous close amid low volumes. The stock had crashed over 6% on Wednesday after its third quarter earnings fell short of market expectations.

Deutsche Equities India has retained its ���buy��� rating on the stock, saying valuations are attractive. At the same time, the brokerage has cut price target from Rs 1625 to Rs 1550 and also pared earnings forecast.

���We maintain buy on HDFC, a play on what we see as a 27-30% sustainable mortgage business RoE (return on equity) available at an adjusted core P/BV (price to book value) of 2 times. The exceptionally difficult environment of Q3FY09 for both demand and cost of funds has already started improving,��� the Deustche Equities note said.

���We have pared our earnings estimates, reflecting lower treasury profits and mark-to-market on foreign currency bonds, and hence also our target price,��� the note added.