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.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
