Accumulate Hdfc Bank; target of Rs 1149: Deven Choksey

Deven Choksey's research report on Hdfc Bank

For Q2FY26, Net Interest Income (NII) grew by 4.8% YoY (0.4% QoQ) to INR 315.5 Bn, 0.6% below our estimates, supported by steady asset repricing despite higher funding costs, with the core NIM at 3.27% versus 3.35% in the prior quarter. Pre-provision operating profit (PPOP) rose 13.0% YoY to INR 279.2 Bn, aided by robust non-interest income of INR 143.5 Bn, led by fee growth and strong trading gains. Net profit (PAT) grew 10.8% YoY (+2.7% QoQ) to INR 186.4 Bn, driven by higher other income and controlled credit costs, partially offset by increased operating expenses.

Outlook

We HDFC Bank’s standalone business at INR 884.0 per share (based on 2.2x FY27E ABV), while we value its stake in the subsidiaries at INR 265.0 per share, implying a SOTP target price of INR 1,149. We reiterate our “ACCUMULATE” rating on the stock.

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