Buy HDFC Bank; target of Rs 1870: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on HDFC Bank

HDFCB’s PAT at Rs103.42bn was marginally higher than estimate (PLe: R101.53bn), led by a better than expected NII growth of 13% YoY on the back of healthy loan growth of 16.5% YoY. NII traction remained lower than loan growth for some time now due to high B/S liquidity & non-retail focus. In our view, HDFCB has faced challenges in maintaining loan growth momentum leading to slower NII growth. Said that, improving traction in retail and commercial & rural banking is expected to improve loan & fees coupled with contained slippages will lead to improvement in overall earnings.

Outlook

We believe that bank has a strong balance sheet with PCR of 70% and ability to absorb higher credit losses, comfortable contingency provisions and restructured stock at <1.5%. With higher earnings visibility leading to superior ROEs of 17-18% over FY23-FY24E, HDFCB stands as one of the best placed in the industry. We reiterate BUY with unchanged TP of Rs1,870 retaining our target multiple at 3.6x Sep-23 ABV.

More Info

At 16:00 hrs HDFC Bank was quoting at Rs 1,521.55, down Rs 23.70, or 1.53 percent.

It has touched an intraday high of Rs 1,556.45 and an intraday low of Rs 1,519.65.

It was trading with volumes of 448,365 shares, compared to its thirty day average of 294,421 shares, an increase of 52.29 percent.

In the previous trading session, the share closed up 1.11 percent or Rs 16.90 at Rs 1,545.25.

The share touched its 52-week high Rs 1,724.30 and 52-week low Rs 1,342.00 on 18 October, 2021 and 28 January, 2021, respectively.

Currently, it is trading 11.76 percent below its 52-week high and 13.38 percent above its 52-week low.

Market capitalisation stands at Rs 843,303.79 crore.For all recommendations report, click here

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