HDB [MARKET PERFORM +5.7%] - Two choices: HDSaison (curbed risk) or FE (growth velocity) - Initiation (Revised)

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We initiate our coverage on HDB with an M-PF rating and 5.7% total return, including a dividend yield of 3.6% and a quasi-dividend yield of 7.2% (resulting from a compulsory M&A related share buyback at 13,000 per share). We expect HDB’s consolidated NII to grow at a 21.4% CAGR in 2017-2020 and remain a primary factor in TOI at ~88% while we don’t see any exciting story from NOII in the medium term. We forecast HD Saison’s consumer finance loan book and HDB standalone’s retail loan book will
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