Prabhudas Lilladher's research report on HDFC Bank
HDFCB saw stable quarter as core PAT was largely in-line at Rs147bn after adjusting for one-time effects viz. (1) stake sale gains of Rs91.3bn on HDB listing (2) buffer provisions of Rs107bn and (2) lower tax rate at 14.7% pursuant to favorable IT order of Rs11.44bn. Buffer provisions stood at 82bps vs 96bps for ICICIB. As LDR has declined to 95% from 103.5% a year ago, focus is back on shoring up loan growth/CASA. Targeted medium term LDR is 87-90%. Bank is confident of achieving guided loan growth given strong domestic demand and upcoming festive season. For FY26/27E, we are factoring loan growth of 11%/12% YoY with an LDR of 92%/90%. PSLC cost remains a key monitorable.
Outlook
We maintain multiple of 2.4x on core FY27ABV but raise SOTP based TP to Rs2,150 from Rs2,125 due to increase in valuation of subsidiaries. Retain ‘BUY’.
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