Buy HDFC Bank; target of Rs 1960: Choice Equity Broking

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

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26 Aug, 2025 12:21

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Choice Equity Broking's report on HDFC Bank

In a major announcement in the India’s financial sector, HDFC Bank approved the merger with the HDFC Ltd. The deal was long speculated as the gradually harmonisation of regulations for banks and HFCs making it less lucrative for both big firms to exist in financing as separate entities. As per the merger arrangement, the share exchange ratio shall be 42 shares of HDFC Bank for every 25 shares of HDFC Ltd. Post-merger, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of the HDFC Bank. The equity shares held by HDFC in the Bank will be extinguished as per the Scheme. As of date, HDFC Ltd. along with two of its wholly-owned subsidiaries, holds 21 % of paid-up equity share capital of HDFC Bank. The merger process is expected to complete within 18 months (Q2,Q3 FY24) as the proposal is subject to approval from various regulatory authorities such as RBI, SEBI, CCI, IRDAI, NCLT and RoC.

Outlook

We maintain ‘Buy’ rating on stock with target price of Rs1,960 valuing standalone HDFC Bank’s business at Rs1,890 (P/ABV 3.4xFY24E) + value of subsidiaries.

More Info

At 15:34 hrs HDFC Bank was quoting at Rs 1,605.00, down Rs 51.45, or 3.11 percent.

It has touched an intraday high of Rs 1,671.00 and an intraday low of Rs 1,602.00.

It was trading with volumes of 409,698 shares, compared to its thirty day average of 475,134 shares, a decrease of -13.77 percent.

In the previous trading session, the share closed up 9.97 percent or Rs 150.15 at Rs 1,656.45.

The share touched its 52-week high Rs 1,724.30 and 52-week low Rs 1,292.00 on 18 October, 2021 and 08 March, 2022, respectively.

Currently, it is trading 6.92 percent below its 52-week high and 24.23 percent above its 52-week low.

Market capitalisation stands at Rs 890,059.33 crore.

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