Goldman Sachs maintained its bullish stance on HDFC Bank and NTPC as these stocks continue to be in the brokerage’s high-conviction list in the Asia Pacific (APAC).

Brokerage Views: Goldman Sachs has a "buy" rating and a target price of ₹1,940 on HDFC Bank, as it sees the bank’s synergies to drive substantial market share gains for India's largest lender. It sees synergies among its various units, which include life and non-life insurance businesses, asset management, its non-banking finance arm and its stock-broking business. 

The brokerage said the lender’s cross-selling execution strategy, aggressive competition in retail loans and deposits, a lack of traction in digital properties and a macro slowdown were key downside risks to its call. 

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The research firm maintained a "buy" call on NTPC with a target price of ₹395 as it sees more legs to thermal growth with renewable rerating in sight. 

Goldman Sachs expect a regulated equity growth with return on equity of 11.2% and cost of equity of 13.5%. The target factors in execution risk for two-to-four-year delays on top of company-guided capacity targets.

Unfavourable regulatory changes and aggressive renewable energy bidding that can dilute project internal rate of return and inefficient capital allocation are among the risks for NTPC, the brokerage said.

Price Action: Shares of the two companies were trading in opposite directions on Thursday. HDFC Bank shares were down 2.16% at ₹1,730.45. Shares of NTPC were up 0.60% at ₹374.90.

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