Sharekhan's research report on HDFC Bank
Focus remains on higher retail deposit mobilisation along with partial sell down of loans as bank intends to bring down LDR at a faster pace to a normalised level at 85-87%. Going forward, improvement in system liquidity along with gradual improvement in asset/liability mix would pave way for margin improvement. However, there could be transient volatility in NIMs due to lower interest rate cycle; but over the period, margins will remain steady. Despite industry-wide stress in the unsecured retail segment, the bank is confident on the quality of the portfolio, given it was already going slow in the past two years.
Outlook
The stock trades at 2.3x/2.1x/1.8x its FY2025E/FY2026E/FY2027E core BV estimates. We maintain BUY with a revised PT of Rs. 2,100. Risk reward is attractive. Retail deposit mobilisation and NIM progression remain key catalysts.
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