HDFC Bank (HDFCB IN)

Rating: BUY | CMP: Rs1,679 | TP: Rs2,000

January 17, 2024 Slight moderation in loan growth likely

Q3FY24 Result Update Quick Pointers:

☑ Change in Estimates | ☑ Target |  Reco  NIM mainly in-line though due lower liquidity and increase in LDR.

Change in Estimates  We trim loan growth by 1% due to system liquidity squeeze.

Current Previous
FY25E FY26E FY25E FY26E HDFCB saw stable quarter; NIM (in-line) improved by 7bps QoQ to 3.73% as
Rating BUY BUY
Target Price 2,000 2,025 excess liquidity was utilized to retire wholesale deposits, thereby increasing
NII (Rs. m) 1,336,201 1,562,734 1,361,027 1,607,691 LDR by ~3% QoQ. Loan growth at 4.9% QoQ was led by CRB, housing and
% Chng. (1.8) (2.8)
Op. Profit (Rs. m) 1,059,283 1,234,900 1,076,967 1,277,130
CC. With system liquidity in shortfall and peak LDR at 77.4%, deposit growth
% Chng. (1.6) (3.3) should be faster for current loan momentum to sustain, failing which system
EPS (Rs.) 90.5 105.7 92.3 109.8
% Chng. (1.9) (3.7)
loan accretion should reduce in FY25/26E, compressing LDRs. Factoring a
15% CAGR for HDFCB, we trim loan growth by 1% in FY25/26E which would
impact NIM by 4/5bps. This could be partly offset by lower opex given softer
Key Financials - Standalone
Y/e Mar FY23 FY24E FY25E FY26E
deposit requirement; our core PAT reduces by 2%/4%. While falling LDR
NII (Rs bn) 1,061 1,145 1,336 1,563 could pressurize NIM, bank would focus on (1) controlling deposit cost and
Op. Profit (Rs bn) 873 928 1,059 1,235 (2) improving share of CASA and higher yielding retail. Maintaining multiple
PAT (Rs bn) 561 629 687 803
EPS (Rs.) 74.9 82.8 90.5 105.7
at 2.7x, we revise TP to Rs2,000 from Rs2,025. Retain ‘BUY’.
Gr. (%) 18.1 10.6 9.2 16.8
DPS (Rs.) 18.8 16.6 22.3 24.3  Slight miss on core PPoP; lower tax rate allowed contingent provisions:
Yield (%) 1.1 1.0 1.3 1.4
NII was a 0.7% miss at Rs284.7bn (PLe Rs286.6bn) although NIM was largely
NIM (%) 3.8 3.5 3.6 3.7
RoAE (%) 15.8 15.5 14.9 15.4 in-line at 3.73% (PLe 3.74%). Yield on IEA was better offset by higher cost of
RoAA (%) 1.9 1.8 1.8 1.8 funds. Credit/deposit growth was 16.7%/16.8% YoY. Other income was ahead
P/BV (x) 3.3 2.9 2.6 2.3
at Rs111bn (PLe Rs103bn) due to higher treasury; fees were lower. Opex was
P/ABV (x) 3.4 3.0 2.6 2.3
PE (x) 22.4 20.3 18.6 15.9 Rs160bn (PLe Rs162bn); core PPoP at Rs206.6bn (PLe Rs210.2bn) was a
CAR (%) 21.3 21.3 20.6 19.9 1.7% miss. PPoP was 3.8% higher. GNPA was better at 1.26% (PLe 1.31%)
owing to stronger recoveries; PCR was stable at 75.3%. However, provisions
Key Data HDBK.BO | HDFCB IN were higher at Rs42.2bn (PLe Rs30bn) as contingent provisions of Rs12.2bn
52-W High / Low Rs.1,758 / Rs.1,460 were created w.r.t. RBI direction on investment in AIF. Tax rate was lower at
Sensex / Nifty 73,129 / 22,032
Market Cap Rs.12,749bn/ $ (2,146,826,273)m 15.3% since Rs15bn was written back due to favorable order received. Hence
Shares Outstanding 7,592m core PAT was 1.6% ahead of PLe; PAT was Rs163.7bn.
3M Avg. Daily Value Rs.25143.24m

 System liquidity and deposit growth to drive loan offtake: Loan growth was
Shareholding Pattern (%) 4.9% sequentially led by CRB (+7.3%), HL (+3.6%) and CC (+6.8%). Retail
Promoter’s - deposits grew by 2.9% QoQ while non-retail deposits de-grew by 3.3% QoQ
Foreign 52.39
Domestic Institution 30.86 as bank chose to focus on granularity and not participate in a price sensitive
Public & Others 16.75 market. System LDR is at a peak of 77.4% and systemic liquidity is in deficit.
Promoter Pledge (Rs bn) -
Hence deposit accretion would be the main driver of credit growth in FY25 and
FY26. Since a sharp rate cut is unlikely in FY25E coupled with slowing deposit
Stock Performance (%)
accretion, system loan growth may be lower than previous estimates. Hence
1M 6M 12M
Absolute 1.4 2.1 5.9 bank would focus on faster growth in deposits over credit and we trim loan
Relative (0.9) (7.8) (13.0) CAGR over FY24-26E by 1% over to 15% (earlier 16%).

Gaurav Jani  Policy rate and deposit growth to determine NIM trajectory: Softer loan
[email protected] | 91-22-66322235 accretion is likely to affect margins. Hence for FY25/26 we cut NII by 2%/3%
Anant Dumbhare and lower NIM by 4/5bps. However, owing to lower replacement cost we still
[email protected] | 91-22-66322257 expect NIM improve over FY24-26E from 3.55% to 3.67%. Over 9MFY24 bank
Aditya Modani opened 270 branches while 570 more are in pipeline for Q4’24. Due to lower
[email protected] | 91-22-66322257
deposit requirement, pace of branch accretion per annum may be lower than
guidance of 1500 branches; hence we reduce opex by ~1% in FY25/26E.

January 17, 2024 1

 HDFC Bank

Earnings miss at Rs163.7bn led by higher provisions and lower fee

YoY gr. QoQ gr.
Financials (Rs m) Q3FY24 Q3FY23 Q2FY24
(%) (%)
NII was in-line, growing by 2.3% YoY Interest income 705,826 572,420 23.3 676,984 4.3
at Rs284.71bn. Interest Expended 421,113 294,141 43.2 403,132 4.5
Net interest income (NII) 284,713 278,279 2.3 273,852 4.0
Other income was higher at
Rs111.4bn led by higher treasury - Treasury income 14,700 2,614 462.4 10,410 41.2
income. Other income 111,370 92,125 20.9 107,078 4.0
Total income 396,084 370,404 6.9 380,931 4.0
Operating expenses 159,611 135,744 17.6 153,992 3.6
Opex was a slight miss at Rs159bn -Staff expenses 53,518 43,610 22.7 51,702 3.5
owing to lower staff and other opex. -Other expenses 106,093 92,134 15.2 102,290 3.7
Operating profit 236,473 234,659 0.8 226,939 4.2
Core operating profit 221,773 232,045 (4.4) 216,529 2.4
Core PPoP was a miss at Rs206.6bn Total provisions 42,166 31,764 32.7 29,038 45.2
led by lower fees. Profit before tax 194,307 202,895 (4.2) 197,900 (1.8)
Tax 30,581 48,791 (37.3) 38,139 (19.8)
Profit after tax 163,725 154,104 6.2 159,761 2.5

Advances growth was 16.7% YoY led Balance sheet (Rs m)

by CRB & agri Loans, deposits grew Deposits 22,139,770 18,947,250 16.8 21,728,578 1.9
at 16.8% YoY led by TD growth of Advances 24,460,757 20,958,675 16.7 23,312,329 4.9
21.8% YoY.
Profitability ratios
YoA – Calc 10.0 9.7 28 9.9 11
NIM in-line at 3.73% while Yield on
CoF – Calc 6.2 5.1 109 6.1 11
advances came in at 10%.
NIM – Calc 3.7 4.2 (51) 3.7 7
RoaA 1.8 2.2 (33) 2.0 (19)
RoaE 14.8 16.8 (202) 16.6 (184)

GNPA/NNPA were better at

Asset Quality
1.26%/0.31%, while PCR increased
to 75.3% Gross NPL (Rs mn) 310,117 286,974 8.1 315,779 (1.8)
Net NPL (Rs mn) 76,641 94,000 (18.5) 80,728 (5.1)
Gross NPL ratio 1.3 1.4 (10) 1.3 (9)
Net NPL ratio 0.3 0.4 (14) 0.3 (3)
Coverage ratio – Calc 75.3 67.2 804 74.4 85

Business & Other Ratios

Low-cost deposit mix 37.7 40.3 (252) 37.6 11
Cost-income ratio 40.3 36.6 365 40.4 (13)
CASA mix stable at 37.7% owing to Non int. inc / total income 28.1 24.9 325 28.1 1
TD growth at 21.8% YoY. Credit deposit ratio 110.5 110.6 (13) 107.3 319
CAR 18.4 19.7 (129) 19.5 (110)
Tier-I 16.8 17.9 (108) 17.8 (100)
Source: Company, PL.

January 17, 2024 2

 HDFC Bank

Key Q3FY24 Conference Call Highlights

Business Review & Outlook:

 Deposits – In Q3FY24, bank added 2.2mn new liability account. Focus on

granularity continues with deposits growing by 16.8% YoY/1.9% QoQ to
Rs22.1trn out of which 84% constitute of retail. Growth was mainly led by term
deposits growing 1.7% QoQ, while savings deposits grew 1.7% QoQ. Current
account deposits stood at Rs2.6trn.

 In terms of regulations from RBI, bank has an LDR of 110% although pre-
merger LDR stood at 85%. Going ahead management would focus on growing
deposit franchise faster than credit growth. In Q3FY24, retail deposits grew by
2.9% QoQ while non-retail deposits de-grew by 3.3% QoQ as bank chose not
to participate in the price sensitive market and focus on granularity.

 Management guided, the constraint to growing deposit has been lack of

liquidity in the market.

 Total advances grew by 4.9%QoQ to Rs24.7trn. Advances growth has been

led by CRB (6.7% QoQ) & retail (3.3% QoQ), while wholesale grew by 1.9%
QoQ ex-HDFC ltd non-individual loans.

 Commercial & Rural Banking grew at 27% YoY and continues to be a focus
segment. Bank currently caters to to 2.1 lakh villages.

 Retail growth momentum continued during the quarter at 3.3% QoQ driven by
mortgage loans. Mortgage loans disbursement was robust with ~18% YoY
increase. Bank added 1.6mn cards in Q3FY24 and payments business grew
by 10.9% YoY.

 Management guided, retail unsecured book is extremely profitable with high

credit quality, focus would be on growing the book further. In terms of lending
to NBFCs, banks primary approach has been towards PSL lending.

Margins/NII

 Bank reported NIM of 3.4% in Q3FY24 on total asset basis and 3.6% on
earning asset basis. Going ahead, growth drivers for margins would be to
enhance retail mix especially personal and mortgage loans, replacing
borrowings from balance sheet with deposits by improving CASA ratio by
adding new customers

 In Q3FY24, RoA / RoE stood at 2%/15.8%.

 LCR for the quarter Q3FY24 stood at 110%, LCR is expected to remain range
bound between 110% to 120%.

Other Income/Opex

 Opex increased by 17.6% YoY driven by both employee as well as other

costs. C/I for the quarter stood at 40.3% while cost to assets stood at 1.26%.
Management aims to eventually bring down C/I ratio to ~35% led by decreasing
opex and bringing in more efficiencies in operations.

January 17, 2024 3

 HDFC Bank

 Branch Expansion – In Q3FY24, bank added 146 branches with total branch
network now at 8,091 branches. Management suggested there are 570
branches in pipeline which are expected to open in Q4FY24. Challenges in
growing branch network is to maintain URC vs Non-URC mix.

 Employee addition – Bank added 10,000 employees during the quarter

across segments primarily in order to position greater engagement with the
customers.

 Fee and commission income was Rs69bn in Q3FY24 growing 12.8%YoY.

94% of total fees and commission income was attributable to retail segment.

Asset quality

 O/S floating + contingent provisions were Rs154bn. Total Provisions (incl.

specific, contingent, floating & general) were 159% of Gross NPAs. PCR stood
at 75% at the end of Q3FY24.

 In Q3FY24, bank reported GNPA/NNPA of 1.26%/0.31%. Slippages were

26bps or Rs70bn, while recoveries/upgrades amounted to Rs.45bn and write-
offs were Rs31bn.

CRB (+31.4% YoY) and Retail (14.1% YoY) were key growth drivers
Loan Composition
Q3FY24 Q3FY23 YoY gr. (%) Q2FY24 QoQ gr. (%)
(Rs mn)
Agri loans witness strong growth at Corporate 4,363,000 3,922,540 11.2 4,281,090 1.9
31.1% YoY. HDFCL non-Ind. 989,000 1,254,358 (21.2) 1,027,550 (3.8)
CRB 6,800,000 5,175,880 31.4 6,339,280 7.3
Agri 930,000 709,120 31.1 904,870 2.8
Home loans saw robust growth of Retail 12,188,000 10,682,462 14.1 11,802,450 3.3
14.9% YoY and personal loans grew PL 1,815,000 1,646,410 10.2 1,786,910 1.6
by 10.2% YoY Auto 1,280,000 1,124,420 13.8 1,255,160 2.0
Mortgages 7,432,000 6,469,482 14.9 7,170,700 3.6
CC 971,000 833,140 16.5 909,070 6.8
Commercial & Rural Banking 2Wheelers 113,000 97,590 15.8 109,570 3.1
continues to be growth driver at Gold 131,000 100,420 30.5 126,040 3.9
31.4% YoY Other Retail 446,000 411,000 8.5 445,000 0.2
Total Advances 24,692,000 21,231,750 16.3 23,545,740 4.9
Source: Company, PL

January 17, 2024 4

 HDFC Bank

Retail book growth at 23% YoY Unsecured growth more calibrated now

Retail Loan Gr. (%) Non-Retail Loan Gr. (%) VF Gr. Unsecured Gr. Retail Ex-VF Gr.

35% 29% 30%

24%
30% 25% 25%
23%
25% 22% 17%
20% 16% 16%
20% 22% 14%
15%
15% 20% 16%
16% 10% 14%
10% 12%
5% 5%
6%
0% 0%
2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

3Q24

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

3Q24
2Q24

2Q24
Source: Company, PL Source: Company, PL

Break up of product wise advances as percentage of total loans

Corporate HDFCL non-Ind. CRB Agri Mortgage Auto/2W PL/CC Other Retail

100%

11%
11%
11%
11%

11%
11%

11%
11%

11%
11%

11%

11%

12%
12%

90%
80%

29%
29%
70%

30%
30%
30%

30%
30%

30%
30%
30%
30%
30%

30%
30%

60%
50%
18%

19%

20%
20%

22%
40%

22%
21%

21%

22%

24%

24%

26%

27%
24%
30%
20%
2Q21 19%

3Q21 19%

1Q22 19%
4Q21 19%

2Q23 19%
4Q22 19%

1Q23 18%
2Q22 18%

3Q22 18%

3Q23 18%

4Q23 18%

2Q24 18%
1Q24 17%

3Q24 17%
10%
0%

Source: Company, PL

Fee income growth declines to 12.9% YoY Staff cost growth decreases; other opex de-grew

Core fees growth YoY Staff expenses growth YoY

45.0% Other Opex growth YoY

80.0% 22.7%
73.6%
60.0% 35.0% 21.5%
37.8% 22.7%
25.0% 19.2%
40.0% 24.0% 12.7%
12.9% 15.0%
20.0%
14.2% 16.7% 15.2%
5.0% 14.1%
0.0%
4Q19
1Q20
2Q20
3Q20
4Q20

2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
3Q24
1Q21

-20.0% -5.0%
-8.6%
-40.0% -15.0%
4Q19
1Q20
2Q20
3Q20
4Q20

2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
2Q23
3Q23
4Q23
1Q24
2Q24
3Q24
1Q21

-36.9%
-60.0%

Source: Company, PL Source: Company, PL

January 17, 2024 5

 HDFC Bank

NIM stable at 3.7% owing to higher CoF. CASA declines to 37.7% due to higher TD growth

NIM (%) CA Ratio (%) SA Ratio (%)

4.2%
4.2%
4.2%

4.1%

4.1%
4.1%

4.0%
4.0%
4.0%

4.0%
4.0%
3.9%

3.9%
4.4%

3.9%

3.7%
3.7%
3.9%

26.2%
24%

24%
25%

27%
23%
23%
24%
25%

28%
25%

25%

30%
25%
26%
25%

29%

27%
29%
28%

26%
29%
29%

28%
3.4%

2.9%

3Q24 11.6%
14%

4Q20 14%
4Q18 14%

4Q21 14%
2Q20 12%
3Q20 12%
1Q20 12%
2Q19 12%

4Q23 13%
1Q19 12%

3Q19 12%

2Q21 12%

4Q22 14%
3Q21 12%
1Q21 11%

2Q22 13%

1Q24 12%
3Q22 13%
1Q22 12%

2Q23 13%

2Q24 11%
1Q23 12%

3Q23 12%
2.4%

4Q19
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23

3Q23
4Q23
1Q24
2Q24
3Q24
2Q23

Source: Company, PL Source: Company, PL

GNPA/NNPA stood 1.26%/0.31% respectively

Gross NPA (%) Net NPA (%)

2.00% 1.76%
1.80% 1.66%
1.60% 1.44%
1.27% 1.26%
1.40%
1.49%
1.20%
1.00% 1.28% 1.21%
0.80% 0.53% 0.59%
0.60%
0.31%
0.40%
0.53%
0.20% 0.43% 0.39%
0.00%
4Q18

2Q19
3Q19

1Q20
2Q20

4Q20
1Q21

3Q21
4Q21

2Q22
3Q22

1Q23
2Q23

4Q23
1Q24

3Q24
1Q19

4Q19

3Q20

2Q21

1Q22

4Q22

3Q23

2Q24
Source: Company, PL

Return ratios improvement depends on margin expansion

RoA decomposition FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E
Interest income 8.8 8.5 7.6 6.9 7.4 8.2 7.9 7.6
Interest expenses 5.0 4.8 3.9 3.3 3.8 4.8 4.5 4.1
Net interest income 3.8 3.7 3.7 3.6 3.6 3.4 3.4 3.5
Other Inc. from operations 1.2 1.9 1.3 1.2 1.1 1.2 1.3 1.2
Total income 5.0 5.6 4.9 4.8 4.8 4.6 4.8 4.7
Employee expenses 0.5 0.5 0.5 0.5 0.6 0.6 0.7 0.7
Other operating expenses 1.3 1.3 1.1 1.1 1.2 1.2 1.2 1.2
Operating profit 3.2 3.8 3.3 3.2 3.0 2.7 2.9 2.8
Tax 0.8 0.6 0.5 0.5 0.5 0.5 0.6 0.6
Loan loss provisions 0.5 1.0 0.9 0.7 0.5 0.4 0.4 0.4
RoAA 1.80 2.17 1.84 1.89 1.92 1.85 1.76 1.80
RoAE 15.0 17.6 14.5 14.9 15.8 15.5 14.9 15.4
Source: Company, PL

January 17, 2024 6

 HDFC Bank

SOTP Valuation of Rs2000, core bank valued at 2.7x on FY25E

Rs per % of
Particulars Stake Valuation Basis
share total
Standalone 100.0% 1,816 89.9 2.7 x Mar'25 ABV
HDFC Life 50.4% 88 4.4 1.0 Mkt Cap
HDFC AMC 52.6% 55 2.7 39.0 FY25E core PAT
HDB Financials 94.7% 33 1.6 2.50 of Mar'23 ABV
HDFC Ergo 50.5% 18 0.9 40.00 of Mar'23 PAT
HSL 95.4% 10 0.5 10.00 of Mar'22 PAT
HDFC Credila 10.0% 1 0.0 2.00 x Mar'23 ABV
Total 2,020 100.0
Holdco discount @ 10% 20
Target Price 2,000
Source: Company, PL

HDFCB one year forward P/ABV trades at 2.3x

P/ABV 3 yr avg. avg. + 1 SD avg. - 1 SD

4.0
3.6 3.6
3.8
3.5

3.0

2.5 2.3
2.6

2.0
2.0
1.5

May-22
Jan-14

May-17

Jan-19
Jun-19

Jan-24
Jun-14

Mar-18

Mar-23
Feb-16

Feb-21
Jul-16

Jul-21
Apr-15

Oct-17

Apr-20

Oct-22
Sep-15

Aug-18

Sep-20

Aug-23
Nov-14

Dec-21
Dec-16

Nov-19

Source: Company, PL

January 17, 2024 7

 HDFC Bank
Income Statement (Rs. m) Quarterly Financials (Rs. m)
Y/e Mar FY23 FY24E FY25E FY26E Y/e Mar Q4FY23 Q1FY24 Q2FY24 Q3FY24
Int. Earned from Adv. 1,785,469 2,244,756 2,535,693 2,790,709 Interest Income 606,256 648,655 676,984 705,826
Int. Earned from invt. 344,268 462,812 483,174 535,748 Interest Expenses 319,523 360,861 403,132 421,113
Others 25,745 43,212 33,347 38,298 Net Interest Income 286,733 287,794 273,852 284,713
Total Interest Income 2,168,280 2,772,043 3,077,439 3,393,349 YoY growth (%) 22.2 20.3 6.7 2.3
Interest Expenses 1,107,381 1,627,327 1,741,238 1,830,616 CEB 67,225 63,372 69,360 69,400
Net Interest Income 1,060,899 1,144,716 1,336,201 1,562,734 Treasury - - - -
Growth(%) 15.7 12.5 14.9 15.9 Non Interest Income 86,195 95,888 107,078 111,370
Non Interest Income 327,936 417,259 458,672 518,398 Total Income 692,450 744,543 784,062 817,197
Net Total Income 1,388,835 1,561,975 1,794,873 2,081,132 Employee Expenses 46,023 50,464 51,702 53,518
Growth(%) 23.3 27.8 10.9 10.6 Other expenses 100,908 102,209 102,290 106,093
Employee Expenses 165,376 211,877 264,297 291,582 Operating Expenses 146,931 152,673 153,992 159,611
Other Expenses 350,715 421,990 471,293 554,649 Operating Profit 225,996 231,009 226,939 236,473
Operating Expenses 516,091 633,867 735,590 846,232 YoY growth (%) 12.7 20.4 3.6 3.2
Operating Profit 872,744 928,108 1,059,283 1,234,900 Core Operating Profits 217,132 211,583 201,430 206,603
Growth(%) 10.4 6.3 14.1 16.6 NPA Provision - - - -
NPA Provision 135,722 119,798 139,916 161,059 Others Provisions 31,234 32,800 29,038 42,166
Total Provisions 137,147 134,005 155,467 178,837 Total Provisions 31,234 32,800 29,038 42,166
PBT 735,598 794,103 903,815 1,056,063 Profit Before Tax 194,763 198,209 197,900 194,307
Tax Provision 174,562 165,175 216,916 253,455 Tax 48,609 47,570 38,139 30,581
Effective tax rate (%) 23.7 20.8 24.0 24.0 PAT 149,189 150,639 159,761 148,716
PAT 561,036 628,928 686,900 802,608 YoY growth (%) 18.2 28.1 15.0 (0.8)
Growth(%) 19.1 12.1 9.2 16.8 Deposits 20,355,057 20,638,000 21,728,578 22,139,770
YoY growth (%) 18.3 16.2 18.3 16.8
Balance Sheet (Rs. m)
Advances 22,089,486 22,209,816 23,312,329 24,460,757
Y/e Mar FY23 FY24E FY25E FY26E
YoY growth (%) 14.8 13.2 13.1 16.7
Face value 1 1 1 1
No. of equity shares 7,490 7,593 7,593 7,593 Key Ratios

Equity 7,490 7,593 7,593 7,593 Y/e Mar FY23 FY24E FY25E FY26E
Networth 3,800,396 4,335,870 4,903,406 5,521,415 CMP (Rs) 1,679 1,679 1,679 1,679
Growth(%) 15.1 14.1 13.1 12.6 EPS (Rs) 74.9 82.8 90.5 105.7
Adj. Networth to NNPAs 85,628 78,495 84,038 93,346 Book Value (Rs) 507 571 646 727
Deposits 20,360,707 23,618,171 28,019,647 33,100,330 Adj. BV (70%)(Rs) 496 561 635 715
Growth(%) 18.3 16.0 18.6 18.1 P/E (x) 22.4 20.3 18.6 15.9
CASA Deposits 8,359,889 8,960,740 10,689,611 12,703,811 P/BV (x) 3.3 2.9 2.6 2.3
% of total deposits 41.1 37.9 38.2 38.4 P/ABV (x) 3.4 3.0 2.6 2.3
Total Liabilities 31,592,767 36,429,454 41,566,663 47,413,617 DPS (Rs) 18.8 16.6 22.3 24.3
Net Advances 22,089,486 25,625,716 29,498,035 33,927,171 Dividend Payout Ratio (%) - - - -
Growth(%) 14.8 16.0 15.1 15.0 Dividend Yield (%) 1.1 1.0 1.3 1.4
Investments 6,006,690 7,033,257 8,065,916 9,216,285
Efficiency
Total Assets 31,592,767 36,429,454 41,566,663 47,413,617
Y/e Mar FY23 FY24E FY25E FY26E
Growth (%) 17.9 15.3 14.1 14.1
Cost-Income Ratio (%) 37.2 40.6 41.0 40.7
Asset Quality C-D Ratio (%) 108.5 108.5 105.3 102.5
Y/e Mar FY23 FY24E FY25E FY26E Business per Emp. (Rs m) 257 232 218 230
Gross NPAs (Rs m) 269,720 313,780 336,395 374,332 Profit per Emp. (Rs lacs) 34 30 26 28
Net NPAs (Rs m) 85,628 78,495 84,038 93,346 Business per Branch (Rs m) 5,088 5,350 5,582 5,878
Gr. NPAs to Gross Adv.(%) 1.2 1.2 1.1 1.1 Profit per Branch (Rs m) 67 68 67 70
Net NPAs to Net Adv. (%) 0.4 0.3 0.3 0.3
Du-Pont
NPA Coverage % 68.3 75.0 75.0 75.1
Y/e Mar FY23 FY24E FY25E FY26E
Profitability (%) NII 3.83 3.71 3.75 3.78
Y/e Mar FY23 FY24E FY25E FY26E Total Income 5.21 5.21 5.29 5.29
NIM 3.8 3.5 3.6 3.7 Operating Expenses 2.10 2.26 2.32 2.31
RoAA 1.9 1.8 1.8 1.8 PPoP 3.11 2.95 2.97 2.98
RoAE 15.8 15.5 14.9 15.4 Total provisions 0.53 0.47 0.52 0.53
Tier I 18.0 18.2 17.9 17.6 RoAA 1.95 1.85 1.83 1.83
CRAR 21.3 21.3 20.6 19.9 RoAE 16.96 16.28 16.21 16.46
Source: Company Data, PL Research Source: Company Data, PL Research

January 17, 2024 8

 HDFC Bank
Price Chart Recommendation History

(Rs)
No. Date Rating TP (Rs.) Share Price (Rs.)
1750
1 08-Jan-24 BUY 2,025 1,682

1633 2 17-Oct-23 BUY 2,025 1,530

3 07-Oct-23 BUY 2,025 1,534
1516
4 21-Sep-23 BUY 2,025 1,564
1398 5 18-Jul-23 BUY 2,025 1,679
6 06-Jul-23 BUY 2,025 1,675
1281
Jan - 22
Jan - 21

Jan - 23

Jan - 24
Jul - 21

Jul - 22

Jul - 23
7 25-May-23 BUY 1,925 1,610
8 22-Apr-23 BUY 1,925 1,672
9 16-Apr-23 BUY 1,925 1,692
10 11-Apr-23 BUY 1,850 1,658

Analyst Coverage Universe

Sr. No. Company Name Rating TP (Rs) Share Price (Rs)
1 AAVAS Financiers Hold 1,560 1,566
2 Axis Bank BUY 1,250 1,137
3 Bank of Baroda BUY 240 235
4 Can Fin Homes BUY 900 781
5 City Union Bank Accumulate 160 153
6 DCB Bank BUY 160 158
7 Federal Bank BUY 180 154
8 HDFC Asset Management Company BUY 3,900 3,501
9 HDFC Bank BUY 2,025 1,682
10 ICICI Bank BUY 1,280 994
11 IndusInd Bank BUY 1,620 1,643
12 Kotak Mahindra Bank BUY 2,250 1,848
13 LIC Housing Finance Hold 460 575
14 State Bank of India BUY 770 642
15 UTI Asset Management Company BUY 900 875

PL’s Recommendation Nomenclature (Absolute Performance)

Buy : > 15%
Accumulate : 5% to 15%
Hold : +5% to -5%
Reduce : -5% to -15%
Sell : < -15%
Not Rated (NR) : No specific call on the stock
Under Review (UR) : Rating likely to change shortly

January 17, 2024 9

 HDFC Bank

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January 17, 2024 DN: c=IN, st=Maharashtra,

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Date: 2024.01.17 08:56:11 +05'30'