Buy HDFC Bank; target of Rs 1925: Prabhudas Lilladher

Prabhudas Lilladher is bullish on HDFC Bank has recommended buy rating on the stock with a target price of Rs 1925 in its research report dated April 16, 2023.

Broker Research

April 17, 2023 / 17:15 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on HDFC Bank

HDFC Bank (HDFCB) saw a mixed quarter. While core PAT at Rs120.8bn was in-line, core PPoP missed PLe by 4.4% due to weak NII which was offset by lower opex and provisions. Asset yields were below est. likely due to loans being booked towards the quarter end. Bank wants to maintain its current NIM, as funding cost rise would be offset by fixed rate loans (45% of book). Retail wholesale mix improved QoQ from 44:56 to 47:53. Retail deposit accretion was healthy (+7.5% QoQ) and its share is now 83% (80% in Mar’22). Bank added 1,479 branches in FY23 and this run-rate would continue in FY24E. However, key highlight is bank’s balance sheet which is merger ready as suggested by high cash and other assets which in the short term could drag NIM, in our view.

Outlook

Maintaining multiple at 3.0x, we roll forward to FY25E core ABV and raise TP from Rs1,850 to Rs1,925. Valuation is at 2.6x FY25 core ABV. Retain ‘BUY’.

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