Accumulate HDFC Bank; target of Rs 1714: KR Choksey

KR Choksey recommended accumulate rating on HDFC Bank with a target price of Rs 1714 in its research report dated April 24, 2024.

Broker Research

April 24, 2024 / 15:13 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

KR Choksey's research report on HDFC Bank

Net Interest Income (NII) for Q4FY24 stood at INR 290,768 Mn, a growth of 24.5% YoY/ 2.1% QoQ. The core NIMs for the quarter stood at 3.44%, a decline of 66 bps YoY but improved by 4 bps QoQ. NII was in line with our estimates. Pre-Provision Operating Profits (PPOP) grew 57.2% YoY/ 23.8% QoQ to INR 292,742 Mn, with operating income increasing by 47.3% YoY/ 19.3% QoQ. PPOP was 2.4% lower than our estimates. Net profit for Q4FY24 stood at INR 165,119 Mn, a surge of 37.1% YoY/ 0.9% QoQ despite higher provisions. This was led by healthy growth in operating profits and few write-back adjustments of taxes. The net profit for the quarter was 12.7% lower than our estimates, led by the higher provisions. As of March 31, 2024, advances were reported at INR 24,848,615 Mn, a growth of 55.2% YoY and 1.6% QoQ. The deposit grew by 26.4% YoY and 7.5% QoQ to INR 23,797,863 Mn, with the CASA ratio at 38.2% as against 44.4% a year ago (vs 37.7% as of December 31, 2023).

Outlook

We have assigned an Adj P/B multiple of 2.0x (earlier 2.2x) on the FY26E Adj Book value for the core banking business, resulting in a target price of INR 1,714 per share (earlier INR 1,950), an upside of 13.7% over the CMP. We downgrade our rating to “ACCUMULATE” from "BUY" on the back of the a) expected slowdown in business growth; and b) the gradual repayment of borrowings in the near term.

For all recommendations report, click here