Buy HDFC Bank; target of Rs 1200: P Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's report on HDFC Bank
"HDFCB reported strong revenue growth as both NII and other income grew ahead of our estimates, while loan growth stood healthy at 22.5% YoY. Deposit growth picked up sharply led by strong accretion in time deposits and helped ease CD ratio by 218bps QoQ. GNPLs increased by 6% QoQ; however, healthy provisions (floating provisions of Rs650m) helped maintain coverage ratio at ~72%. Restructured loan portfolio increased by 4.5% QoQ equating to 0.1% of total loans. We maintain our estimates and ‘BUY’ rating with a PT of Rs1,200."

"GNPLs increased by 6% QoQ as bank reported a slippage rate of 1.4% (annualized), largely belonging to agriculture & SME segment. Coverage ratio declined by 207bps QoQ, while outstanding restructured assets stood at 0.1% of total loans. HDFCB made floating provisions of Rs650m, taking the total quantum of such provisions to Rs15.9bn. We maintain our earnings estimates and ‘BUY’ rating with a PT of Rs 1,200", says Prabhudas Lilladher research report.

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