Buy HDFC Bank; target of Rs 1925: Prabhudas Lilladher

Prabhudas Lilladher is bullish on HDFC Bank has recommended buy rating on the stock with a target price of Rs 1925 in its research report dated May 25, 2023.

Broker Research

May 26, 2023 / 16:37 IST

Buy

26 Aug, 2025 12:21

Volume

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Prabhudas Lilladher's research report on HDFC Bank

Key takeaways from HDFCB analyst day were 1) Bank would protect loan growth (1.5-2.0x of the system) irrespective of its size. 2) Deposit market share is ~10% and bank would grow by gaining market share; incremental deposit accretion (18-20% market share) may not be a challenge. 3) On NIM, bank is willing to let go volumes in case of intense competition; it sold down Rs1trn of corporate loans in FY23 to not compromise on pricing. 4) Postmerger focus would shift from product-based to customer centric. Immediate benefit of the merger would be access to 25mn HDFC group customers that do not bank with HDFCB while 60-70% of HDFC Ltd. customers do not have a liability relationship with the bank. 5) Target is to bring down cost to income to 30% over the next decade (36% on merged basis in FY23). 6) RoA postmerger would be maintained between 1.9-2.1%.

Outlook

We keep multiple unchanged at 3.0x on core FY25E ABV and retain BUY with TP of Rs1,925.

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