HDFC Bank (HDFCB IN)

Rating: BUY | CMP: Rs1,530 | TP: Rs2,025

October 17, 2023 Margin trajectory to improve

Q2FY24 Result Update Quick Pointers:

☑ Change in Estimates |  Target |  Reco  NII mainly in-line though NIM beat due to better investment yields.

Change in Estimates  Core earnings beat of 12% due to lower credit costs and taxes.
Current Previous
FY25E FY26E FY25E FY26E HDFCB saw good quarter; NIM was 4bps higher to PLe at 3.66% and core
Rating BUY BUY
Target Price 2,025 2,025 PPoP was a 2.9% beat owing to better fees. Loan growth at 5.0% QoQ was
NII (Rs. m) 13,61,807 16,19,553 13,79,116 16,33,624 broad based led by CRB/agri/retail/corporate. Asset quality was stable with
% Chng. (1.3) (0.9)
Op. Profit (Rs. m) 10,84,333 12,87,387 10,97,578 13,03,474
GNPA at 1.34% (-6bps QoQ) and controlled net slippages. While NIM was
% Chng. (1.2) (1.2) affected (-37bps QoQ) by surplus liquidity, we believe margins have bottomed
EPS (Rs.) 93.1 111.0 94.6 112.7
% Chng. (1.5) (1.6)
out as excess cash has already been drawn down which should normalize
NIM in H2FY24E. Moreover, as high cost liabilities of HDFCL are replaced, NIM
should enhance over FY24-26E from 3.57% to 3.72%. Due to higher fees/lower
Key Financials - Standalone
Y/e Mar FY23 FY24E FY25E FY26E
taxes we raise FY24E core PAT by ~3%, although FY25/26E earnings remain
NII (Rs bn) 1,061 1,154 1,362 1,620 unchanged. With core RoA of 1.74% and likely core PAT CAGR of ~19% over
Op. Profit (Rs bn) 873 1,005 1,084 1,287 FY24-26E, HDFCB remains our preferred pick among large-caps. We maintain
PAT (Rs bn) 561 626 706 841
EPS (Rs.) 74.9 82.7 93.1 111.0
multiple at 2.8x on Sep’25E core ABV and TP at Rs2,025. Retain ‘BUY’.
Gr. (%) 18.1 10.4 12.7 19.2
DPS (Rs.) 18.8 17.9 21.4 25.5  Better fees; core PAT beat led by lower provisions/tax rate: NII was largely
Yield (%) 1.2 1.2 1.4 1.7
in-line at Rs273.85bn (PLe Rs273.58bn). NIM was a tad better at 3.66% (PLe
NIM (%) 3.8 3.6 3.6 3.7
RoAE (%) 15.8 15.4 15.4 16.2 3.62%); yield on IEA was higher at 9.05% (PLe 8.93%) while cost of funds at
RoAA (%) 1.9 1.8 1.8 1.8 5.77% was 3bps more. Credit growth was 13.1% YoY while deposits grew
P/BV (x) 3.0 2.7 2.4 2.1
18.3% YoY. Other income was higher at Rs107bn (PLe Rs94bn) due to fees
P/ABV (x) 3.1 2.7 2.4 2.1
PE (x) 20.4 18.5 16.4 13.8 and treasury. Opex was a bit lower at Rs154bn (PLe Rs155.7bn). PPoP was
CAR (%) 21.3 21.1 20.5 20.0 Rs226.9bn (PLe Rs211.98bn) and while core PPoP at Rs201.4bn was 2.9%
above PLe. GNPA/NNPA was in-line at 1.34%/0.35% as net slippages came
Key Data HDBK.BO | HDFCB IN in as expected; PCR was stable at 74.4%. Provisions were lesser at Rs29bn
52-W High / Low Rs.1,758 / Rs.1,427 (PLe Rs32.5bn). Tax rate was lower at 19.3% (last quarter 24%). PAT came in
Sensex / Nifty 66,167 / 19,732
Market Cap Rs.11,597bn/ $ 1,39,261m at Rs159.8bn while core PAT at Rs139.17bn was 12% ahead of PLe.
Shares Outstanding 7,582m
3M Avg. Daily Value Rs.35391.45m  Credit offtake QoQ was broad based: Sequential loan growth was broad
based and healthy at 5.0% led by CRB (+9.7%), agri (+13.6%), corporate (ex-
Shareholding Pattern (%) HDFCL, +5.8%) and retail (+3.1%). Retail accretion was led by mortgages,
Promoter’s - auto, gold and 2W. Unsecured growth was softer to system (+0.9%) since bank
Foreign 52.13
Domestic Institution 30.64 is taking a more calibrated stance however, it remains a focus segment. With
Public & Others 17.23 the merger being concluded, there are no downside risks to loan growth and
Promoter Pledge (Rs bn) -
we expect existing credit momentum to sustain (+4.5-5.0% QoQ) which would
translate to ~15% YoY loan growth in FY24E. Deposit accretion was strong this
Stock Performance (%)
quarter (+5.3% QoQ) largely led by TD growth (+8.3%). Share of retail deposits
1M 6M 12M
Absolute (8.0) (9.6) 6.3 as per LCR was 56.5% pre-merger which inched up to 59.7% in Q2’24.
Relative (5.6) (17.5) (7.0)
 NIM to normalize in H2FY24: NIM declined by 37bps QoQ which was largely
Gaurav Jani attributable to liquidity build-up and ICRR requirements. However, liquidity has
[email protected] | 91-22-66322235 been drawn down towards the end of the quarter suggesting that margins
Anant Dumbhare should normalize in H2FY24. We are factoring NIM to improve from 3.66% in
[email protected] | 91-22-66322257 Q2’24 to 3.77% in Q4’24. FY24 performance would be muted, given sharp fall
in NIM, however, as per our calculations ~43% of HDFCL liabilities (high-cost)
are expected to be replaced from FY23 to FY26E which should translate to
NIM improvement from 3.57% to 3.72% over FY24-26E.

October 17, 2023 1

 HDFC Bank

Earnings beat at Rs159.8bn led by lower provisions and tax rate

YoY gr. QoQ gr.
Financials (Rs m) Q2FY24 Q2FY23 Q1FY24
(%) (%)
NII was in-line, growing by 6.7% YoY Interest income 676,984 517,853 30.7 648,655 4.4
at Rs273.85bn. Interest Expended 403,132 261,249 54.3 360,861 11.7
Net interest income (NII) 273,852 256,604 6.7 287,794 (4.8)
Other income was higher at Rs107bn
led by higher fees and treasury - Treasury income 10,410 (2,531) (511.3) 5,520 88.6
income. Other income 107,078 94,326 13.5 95,888 11.7
Total income 380,931 350,930 8.5 383,682 (0.7)
Operating expenses 153,992 123,538 24.7 152,673 0.9
Opex was a slight miss at Rs154bn -Staff expenses 51,702 37,908 36.4 50,464 2.5
owing to lower staff and other opex. -Other expenses 102,290 85,630 19.5 102,209 0.1
Operating profit 226,939 227,392 (0.2) 231,009 (1.8)
Core operating profit 216,529 229,923 (5.8) 225,489 (4.0)
Core PPoP was a beat at Rs201.4bn Total provisions 29,038 37,131 (21.8) 32,800 (11.5)
led by better fees. Profit before tax 197,900 190,260 4.0 198,209 (0.2)
Tax 38,139 45,061 (15.4) 47,570 (19.8)
Profit after tax 159,761 145,199 10.0 150,639 6.1

Advances growth was 13.1% YoY led Balance sheet (Rs m)

by CRB & agri Loans, deposits grew Deposits 21,728,578 18,362,914 18.3 20,638,000 5.3
at 18.3% YoY led by TD growth of Advances 23,312,329 20,620,008 13.1 22,209,816 5.0
25.9% YoY.
Profitability ratios
YoA – Calc 9.9 9.1 82 10.2 (28)
NIM declines to 3.66% while Yield on
CoF – Calc 6.1 4.7 137 5.7 37
advances came in at 9.9%.
NIM – Calc 3.7 4.0 (37) 4.0 (37)
RoaA 2.0 2.1 (6) 2.0 2
RoaE 16.6 16.3 28 16.1 55

GNPA/NNPA were in-line at

Asset Quality
1.34%/0.35%, while PCR remained
stable at 74.4% Gross NPL (Rs mn) 315,779 292,150 8.1 315,066 0.2
Net NPL (Rs mn) 80,728 97,567 (17.3) 81,364 (0.8)
Gross NPL ratio 1.3 1.4 (6) 1.4 (6)
Net NPL ratio 0.3 0.5 (13) 0.4 (2)
Coverage ratio – Calc 74.4 66.6 783 74.2 26

Business & Other Ratios

Low-cost deposit mix 37.6 41.4 (374) 39.4 (176)
Cost-income ratio 40.4 35.2 522 39.8 63
CASA mix declined to 37.6% owing to Non int. inc / total income 28.1 26.9 123 25.0 312
TD growth at 25.9% YoY. Credit deposit ratio 107.3 112.3 (500) 107.6 (33)
CAR 19.5 18.3 117 19.2 30
Tier-I 17.8 17.5 30 17.8 3

Source: Company, PL.

October 17, 2023 2

 HDFC Bank

Key Q2FY24 Conference Call Highlights

Business Review & Outlook:

 Deposits – In Q2FY24, bank added 2.7mn new liability accounts and. Deposits
grew by 18.3% YoY to Rs21.7trn out of which 83-85% constitute of retail.
Growth was mainly led by term deposits growing 7.8% QoQ, while savings
deposits grew 2% QoQ. Current account deposits stood at Rs2.5trn out of
which retail constitutes to 72%.

 Assets – Advances growth has been led by CRB (9.7% QoQ) & retail (3.1%
QoQ), while wholesale grew by 5.8% QoQ ex-HDFC ltd non-individual loans.
HDFC Ltd.’s mortgage portfolio has been moved to repo based pricing.

 Total advances grew by 13.1% YoY to Rs23.2trn. Regarding wholesale book

of HDFC Ltd, the construction finance and LRD book would be the focus area
from banks strategic perspective and should witness growth in H2FY24, the
corporate loan book would be assessed as part of overall exposure to various
corporates.

 Commercial & Rural Banking grew at 29% YoY and continues to be a focus
segment. Bank currently caters to to 1.85 lakh villages while target is to expand
to 2 lakh villages.

 Retail growth momentum continued during the quarter at 17.9% YoY driven
by Home loans and Personal loans. Home loans demand was robust with
~20% increase in mortgage cases post-merger. In Q1FY24, bank added 1.7mn
new cards. Xpress car loans contribute 30% of new volumes. Bank added
1.5mn cards in Q1FY24 and payments business grew by 12.8% YoY.

Margins/NII

 Bank reported NIM of 3.4% in Q2FY24 on total asset basis and 3.6% on
earning asset basis. Management said bank took a hit of 25bps on margins
due to ICRR and excess liquidity led by the merger management.

 In Q2FY24, RoA / RoE stood at 2%/16.6%. Bank continues to guide RoA to be

in the range of ~1.9-2.1%.

 LCR for the quarter Q2FY24 stood at 121% absorbing the ICRR.

Other Income/Opex

 Opex increased by 24.7% YoY driven by both employee as well as other

costs.

 Branch Expansion – In Q2FY24, bank added 85 branches with total branch

network now at 7,945 branches (10,446 - including HDFC Ltd. Branch offices).
Management suggested 90% branches achieve breakeven with 2 years of
operations.

 Management would continue to focus on digital and technology front, PayZapp

2.0 app has currently 3mn users and handles 0.25mn transactions per day. AI
driven channel platform, WhatsApp and chat banking are working smoothly.

October 17, 2023 3

 HDFC Bank

 Employee addition – Bank added 16,000 employees during the quarter

across segments primarily in order to position greater engagement with the
customers.

 Management suggested significant engagement levels in subsidiaries post –

merger, focus is on process optimization across geographies so as to enhance
cross sales and reduce TAT for all the products offered by the banks.

 Fee and commission income was Rs69.36bn in Q2FY24 growing 19.5%

QoQ. 92% of total fees and commission income was attributable to retail
segment. Management suggested fee to other income would maintain the ratio
of 65%.

Asset quality

 O/S floating + contingent provisions were Rs156bn. Total Provisions (incl.

specific, contingent, floating & general) were 156% of Gross NPAs. PCR stood
at 74% at the end of Q2FY24.

 In Q2FY24, bank reported GNPA/NNPA of 1.34%/0.35%. Slippages were

32bps or Rs78bn, while recoveries/upgrades amounted to Rs.45bn and write-
offs were Rs32.5bn.

 NPA for HDFC Ltd. Non-retail book witnessed steady decline over past six
quarters, management suggested they are comfortable with quality of book as
bank has adequate PCR to the tune of 74%.

CRB (+29.6% YoY) and Retail (14.6% YoY) were key growth drivers
Loan Composition
Q2FY24 Q2FY23 YoY gr. (%) Q1FY24 QoQ gr. (%)
(Rs mn)
Agri loans witness strong growth at Corporate 4,281,090 3,967,790 7.9 4,046,370 5.8
28.8% YoY. HDFCL non-Ind. 1,027,550 1,291,270 (20.4) 1,092,710 (6.0)
CRB 6,147,280 4,744,620 29.6 5,631,920 9.2
Agri 904,870 702,780 28.8 796,370 13.6
Home loans saw robust growth of Retail 11,995,050 10,466,890 14.6 11,632,250 3.1
14.1% YoY and personal loans grew PL 1,786,910 1,548,200 15.4 1,767,340 1.1
by 15.4% YoY Auto 1,255,160 1,087,880 15.4 1,217,320 3.1
Mortgages 7,170,700 6,285,040 14.1 6,927,670 3.5
CC 909,070 819,660 10.9 904,360 0.5
Commercial & Rural Banking 2Wheelers 109,570 95,970 14.2 103,670 5.7
continues to be growth driver at Gold 126,040 94,340 33.6 116,910 7.8
29.6% YoY Other Retail 637,600 535,800 19.0 594,980 7.2
Total Advances 23,546,340 20,885,200 12.7 22,446,500 4.9
Source: Company, PL

October 17, 2023 4

 HDFC Bank

Retail book growth at 20% YoY Unsecured growth more calibrated now

Retail Loan Gr. (%) Non-Retail Loan Gr. (%) VF Gr. Unsecured Gr. Retail Ex-VF Gr.

35% 30%
29% 24%
30% 25% 25%
19%
25% 22% 20% 20% 16% 15%
22%
20% 15%
15% 20% 16%
10% 14%
10% 16% 15% 12%
5%
5% 6%
0%
0%

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24
2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24
Source: Company, PL
Source: Company, PL

Break up of product wise advances as percentage of total loans

Corporate HDFCL non-Ind. CRB Agri Mortgage Auto/2W PL/CC Other Retail

100%
11%

11%
11%

11%

11%
11%
11%

11%
11%

11%

12%
12%

11%
90%
80%
70%

29%
30%
30%

30%
30%

30%
30%

30%
30%

30%
30%

30%
30%

60%
50%
18%

19%

20%
20%

22%
40%

22%
21%

21%

22%

23%

24%

25%
24%
30%
20%
2Q21 19%

3Q21 19%

1Q22 19%
4Q21 19%

2Q23 19%
4Q22 19%

1Q23 18%
2Q22 18%

3Q23 18%
3Q22 18%

4Q23 18%

2Q24 18%
1Q24 17%
10%
0%

Source: Company, PL

Fee income stable at 18% YoY Staff cost growth increases; other opex de-grew

Core fees growth YoY Staff expenses growth YoY

45.0% Other Opex growth YoY

80.0% 36.4%
73.6%
60.0% 35.0% 21.5%
37.8% 22.7%
25.0% 19.2%
40.0% 24.0% 12.7%
18.0%
20.0% 15.0%
19.5%
14.2% 16.7%
5.0% 14.1%
0.0%
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21

2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
1Q22

-20.0% -5.0%
-8.6%
-40.0% -15.0%
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21

2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
1Q22

-36.9%
-60.0%

Source: Company, PL Source: Company, PL

October 17, 2023 5

 HDFC Bank

NIM decline to 3.7% owing to higher CoF. CASA declines to 37.6% due to higher TD growth

NIM (%) CA Ratio (%) SA Ratio (%)

4.2%
4.2%
4.2%

4.1%

4.1%
4.1%

4.0%
4.0%
4.0%

4.0%
4.0%
3.9%
4.4%

3.9%
3.9%

3.7%
3.9%

24%

24%
25%

27%
23%
23%
24%
25%

28%
25%

25%

25%

30%
26%
25%

29%

27%
29%
28%

29%

26%
29%

28%
3.4%

2.9%

14%

14%
14%

14%
12%
12%
12%
12%

13%
12%

12%

12%

14%
12%
11%

13%

12%
13%

11%
12%

13%
12%

12%
2.4%

4Q18
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21

2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
1Q22
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22

1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
4Q22

Source: Company, PL Source: Company, PL

GNPA/NNPA stood 1.34%/0.35% respectively

Gross NPA (%) Net NPA (%)

2.00% 1.76%
1.80% 1.66%
1.60% 1.44%
1.27% 1.34%
1.40%
1.49%
1.20%
1.00% 1.28% 1.21%
0.80% 0.53% 0.59%
0.60% 0.35%
0.40%
0.53%
0.20% 0.43% 0.39%
0.00%
2Q19
3Q19
4Q19

2Q20
3Q20
4Q20

2Q21
3Q21
4Q21

2Q22
3Q22
4Q22

2Q23
3Q23
4Q23

2Q24
4Q18
1Q19

1Q20

1Q21

1Q22

1Q23

1Q24
Source: Company, PL

Return ratios improvement depends on margin expansion

RoA decomposition FY18 FY19 FY20 FY21 FY22 FY23 FY24E FY25E
Interest income 8.6 8.8 8.5 7.6 6.9 7.4 8.1 7.7
Interest expenses 4.8 5.0 4.8 3.9 3.3 3.8 4.7 4.3
Net interest income 3.8 3.8 3.7 3.7 3.6 3.6 3.4 3.4
Other Inc. from operations 1.6 1.2 1.9 1.3 1.2 1.1 1.4 1.2
Total income 5.4 5.0 5.6 4.9 4.8 4.8 4.8 4.6
Employee expenses 0.6 0.5 0.5 0.5 0.5 0.6 0.6 0.6
Other operating expenses 1.3 1.3 1.3 1.1 1.1 1.2 1.2 1.2
Operating profit 3.5 3.2 3.8 3.3 3.2 3.0 2.9 2.7
Tax 0.8 0.8 0.6 0.5 0.5 0.5 0.6 0.6
Loan loss provisions 0.6 0.5 1.0 0.9 0.7 0.5 0.4 0.4
RoAA 2.00 1.80 2.17 1.84 1.89 1.92 1.83 1.78
RoAE 18.2 15.0 17.6 14.5 14.9 15.8 15.4 15.4
Source: Company, PL

October 17, 2023 6

 HDFC Bank

SOTP Valuation of Rs2025, core bank valued at 3x on FY25E

% of
Particulars Stake Rs per share Valuation Basis
total
Standalone 100.0% 1,845 90.2 3.0 x Mar'25 ABV
HDFC Life 50.4% 91 4.5 1.00 Mkt Cap
HDFC AMC 52.6% 45 2.2 27.00 Sep’25 core EPS
HDB Financials 95.0% 33 1.6 2.50 of Mar'23 ABV
HDFC Ergo 50.5% 18 0.9 40.00 of Mar'23 PAT
HSL 96.0% 10 0.5 10.00 of Mar'22 PAT
Bandhan Bank 5.0% 3 0.1 1.00 Mkt Cap
HDFC Credila 10.0% 1 0.0 2.00 of Mar'23 ABV
Total 2,045 100.0
Holdco discount 20
Target Price 2,025
Source: Company, PL

HDFCB one year forward P/ABV trades at 2.3x

P/ABV 3 yr avg. avg. + 1 SD avg. - 1 SD

4.0
3.6 3.6
3.8
3.5

3.0

2.5
2.6

2.0 2.3
2.0
1.5
May-18

May-23
Jan-15
Jun-15

Jun-20
Mar-14

Mar-19

Jan-20
Feb-17

Feb-22
Jul-17

Jul-22
Oct-13

Apr-16

Oct-18

Apr-21

Oct-23
Dec-17

Nov-20

Dec-22
Aug-14

Nov-15

Sep-16

Aug-19

Source: Company, PL Sep-21

October 17, 2023 7

 HDFC Bank
Income Statement (Rs. m) Quarterly Financials (Rs. m)
Y/e Mar FY23 FY24E FY25E FY26E Y/e Mar Q3FY23 Q4FY23 Q1FY24 Q2FY24
Int. Earned from Adv. 17,85,469 22,33,462 24,98,568 27,74,744 Interest Income 5,72,420 6,06,256 6,48,655 6,76,984
Int. Earned from invt. 3,44,268 4,48,249 4,98,103 5,51,950 Interest Expenses 2,94,141 3,19,523 3,60,861 4,03,132
Others 25,745 43,869 33,739 39,210 Net Interest Income 2,78,279 2,86,733 2,87,794 2,73,852
Total Interest Income 21,68,280 27,55,713 30,59,635 34,01,918 YoY growth (%) 22.4 22.2 20.3 6.7
Interest Expenses 11,07,381 16,02,136 16,97,828 17,82,366 CEB 61,495 67,225 63,372 69,360
Net Interest Income 10,60,899 11,53,577 13,61,807 16,19,553 Treasury - - - -
Growth(%) 15.7 17.5 11.5 17.6 Non Interest Income 86,647 86,195 95,888 1,07,078
Non Interest Income 3,27,936 4,77,930 4,57,052 5,19,373 Total Income 6,59,067 6,92,450 7,44,543 7,84,062
Net Total Income 13,88,835 16,31,507 18,18,859 21,38,926 Employee Expenses 43,610 46,023 50,464 51,702
Growth(%) 23.3 29.5 8.8 11.5 Other expenses 92,134 1,00,908 1,02,209 1,02,290
Employee Expenses 1,65,376 2,09,479 2,45,093 2,66,491 Operating Expenses 1,35,744 1,46,931 1,52,673 1,53,992
Other Expenses 3,50,715 4,16,815 4,89,434 5,85,048 Operating Profit 2,29,181 2,25,996 2,31,009 2,26,939
Operating Expenses 5,16,091 6,26,294 7,34,526 8,51,539 YoY growth (%) 13.5 12.7 20.4 3.6
Operating Profit 8,72,744 10,05,213 10,84,333 12,87,387 Core Operating Profits 2,14,770 2,17,132 2,11,583 2,01,430
Growth(%) 10.4 15.2 7.9 18.7 NPA Provision - - - -
NPA Provision 1,35,722 1,13,525 1,38,697 1,61,131 Others Provisions 31,764 31,234 32,800 29,038
Total Provisions 1,37,147 1,26,839 1,55,194 1,80,252 Total Provisions 31,764 31,234 32,800 29,038
PBT 7,35,598 8,78,374 9,29,139 11,07,135 Profit Before Tax 1,97,417 1,94,763 1,98,209 1,97,900
Tax Provision 1,74,562 2,01,453 2,22,993 2,65,712 Tax 48,791 48,609 47,570 38,139
Effective tax rate (%) 23.7 22.9 24.0 24.0 PAT 1,49,943 1,49,189 1,50,639 1,59,761
PAT 5,61,036 6,26,058 7,06,145 8,41,423 YoY growth (%) 18.0 18.2 28.1 15.0
Growth(%) 19.1 11.6 12.8 19.2 Deposits 1,89,47,250 2,03,55,057 2,06,38,000 2,17,28,578
YoY growth (%) 18.3 18.3 16.2 18.3
Balance Sheet (Rs. m)
Advances 2,09,58,675 2,20,89,486 2,22,09,816 2,33,12,329
Y/e Mar FY23 FY24E FY25E FY26E
YoY growth (%) 17.3 14.8 13.2 13.1
Face value 1 1 1 1
No. of equity shares 7,490 7,582 7,582 7,582 Key Ratios

Equity 7,490 7,582 7,582 7,582 Y/e Mar FY23 FY24E FY25E FY26E
Networth 38,00,396 43,26,562 48,70,294 55,18,190 CMP (Rs) 1,530 1,530 1,530 1,530
Growth(%) 15.1 13.8 12.6 13.3 EPS (Rs) 74.9 82.7 93.1 111.0
Adj. Networth to NNPAs 85,628 81,292 86,406 96,154 Book Value (Rs) 507 571 642 728
Deposits 2,03,60,707 2,41,92,757 2,88,36,735 3,42,74,240 Adj. BV (70%)(Rs) 496 560 631 715
Growth(%) 18.3 18.8 19.2 18.9 P/E (x) 20.4 18.5 16.4 13.8
CASA Deposits 83,59,889 87,34,809 1,05,84,351 1,27,85,458 P/BV (x) 3.0 2.7 2.4 2.1
% of total deposits 41.1 36.1 36.7 37.3 P/ABV (x) 3.1 2.7 2.4 2.1
Total Liabilities 3,15,92,767 3,67,72,015 4,23,57,531 4,89,61,972 DPS (Rs) 18.8 17.9 21.4 25.5
Net Advances 2,20,89,486 2,54,02,394 2,95,11,197 3,42,76,014 Dividend Payout Ratio (%) - - - -
Growth(%) 14.8 15.0 16.2 16.1 Dividend Yield (%) 1.2 1.2 1.4 1.7
Investments 60,06,690 73,18,513 82,47,192 95,57,632
Efficiency
Total Assets 3,15,92,767 3,67,72,015 4,23,57,531 4,89,61,972
Y/e Mar FY23 FY24E FY25E FY26E
Growth (%) 17.9 16.4 15.2 15.6
Cost-Income Ratio (%) 37.2 38.4 40.4 39.8
Asset Quality C-D Ratio (%) 108.5 105.0 102.3 100.0
Y/e Mar FY23 FY24E FY25E FY26E Business per Emp. (Rs m) 257 237 238 257
Gross NPAs (Rs m) 2,69,720 3,15,780 3,35,926 3,74,177 Profit per Emp. (Rs lacs) 34 30 29 32
Net NPAs (Rs m) 85,628 81,292 86,406 96,154 Business per Branch (Rs m) 5,088 5,143 5,331 5,599
Gr. NPAs to Gross Adv.(%) 1.2 1.2 1.1 1.1 Profit per Branch (Rs m) 67 65 65 69
Net NPAs to Net Adv. (%) 0.4 0.3 0.3 0.3
Du-Pont
NPA Coverage % 68.3 74.3 74.3 74.3
Y/e Mar FY23 FY24E FY25E FY26E
Profitability (%) NII 3.83 3.71 3.75 3.78
Y/e Mar FY23 FY24E FY25E FY26E Total Income 5.21 5.21 5.29 5.29
NIM 3.8 3.6 3.6 3.7 Operating Expenses 2.10 2.26 2.32 2.31
RoAA 1.9 1.8 1.8 1.8 PPoP 3.11 2.95 2.97 2.98
RoAE 15.8 15.4 15.4 16.2 Total provisions 0.53 0.47 0.52 0.53
Tier I 18.0 18.2 17.8 17.6 RoAA 1.95 1.85 1.83 1.83
CRAR 21.3 21.1 20.5 20.0 RoAE 16.96 16.28 16.21 16.46
Source: Company Data, PL Research Source: Company Data, PL Research

October 17, 2023 8

 HDFC Bank
Price Chart Recommendation History

(Rs)
No. Date Rating TP (Rs.) Share Price (Rs.)
1750
1 07-Oct-23 BUY 2,025 1,534
2 21-Sep-23 BUY 2,025 1,564
1608
3 18-Jul-23 BUY 2,025 1,679
1467
4 06-Jul-23 BUY 2,025 1,675
5 25-May-23 BUY 1,925 1,610
1325
6 22-Apr-23 BUY 1,925 1,672
1184 7 16-Apr-23 BUY 1,925 1,692
Oct - 20

Oct - 21
Apr - 21

Apr - 22

Oct - 22

Apr - 23

Oct - 23
8 11-Apr-23 BUY 1,850 1,658
9 14-Jan-23 BUY 1,850 1,601
10 05-Jan-23 BUY 1,800 1,600

Analyst Coverage Universe

Sr. No. Company Name Rating TP (Rs) Share Price (Rs)
1 AAVAS Financiers Hold 1,560 1,726
2 Axis Bank BUY 1,170 1,001
3 Bank of Baroda BUY 235 215
4 Can Fin Homes BUY 900 774
5 City Union Bank Accumulate 160 129
6 DCB Bank BUY 150 123
7 Federal Bank BUY 175 147
8 HDFC Asset Management Company BUY 3,000 2,757
9 HDFC Bank BUY 2,025 1,534
10 ICICI Bank BUY 1,180 945
11 IndusInd Bank BUY 1,530 1,435
12 Kotak Mahindra Bank BUY 2,250 1,744
13 LIC Housing Finance Hold 430 468
14 State Bank of India BUY 770 594
15 UTI Asset Management Company BUY 900 787

PL’s Recommendation Nomenclature (Absolute Performance)

Buy : > 15%
Accumulate : 5% to 15%
Hold : +5% to -5%
Reduce : -5% to -15%
Sell : < -15%
Not Rated (NR) : No specific call on the stock
Under Review (UR) : Rating likely to change shortly

October 17, 2023 9

 HDFC Bank

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October 17, 2023 DN: c=IN, st=Maharashtra,

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Date: 2023.10.17 08:48:43 +05'30'