Buy HDFC Bank; target of Rs 2300: Motilal Oswal

Motilal Oswal's research report on HDFC Bank

HDFC Bank’s (HDFCB) annual report highlights the bank’s focus on sustainable growth over the medium term as it continues to invest in strengthening its physical infrastructure and digital capabilities. The bank highlighted that it focused on taking singles in FY25 with aim to reduce CD ratio as per the regulatory guidance, and it is now well positioned to go for boundaries. After 5% YoY growth in FY25, the bank has suggested to grow inline with the system in current fiscal and higher than the system in FY27E. We estimate HDFCB to deliver loan growth of 10.7%/12.5% in FY26/FY27E.

Outlook

We estimate HDFCB to deliver FY27E RoA/RoE of 1.9%/14.9%. Reiterate BUY with a TP of INR2,300 (2.6x FY27E ABV + INR283 for subsidiaries).