HDFC Bank Q4 Results Review - Inline; Building In Resilience: Dolat Capital

Dolat Capital Report

HDFC Bank Ltd. results were in-line with net interest income and pre-provision operating profit growth at 1.5%/20% YoY on merged basis and stable net interest margin QoQ at 3.4%.

Operating metrics benefitted from one-time gain through Credila stake sale at Rs 73 billion. Benefits of tax reversal (Rs 44 billion) and stake sale gains were nullified by Rs 109 billion of floating provisions.

Management remains confident of continued market share gains in deposits (+7.5% QoQ) and guides stable net interest margin in the interim. Key lever for any NIM expansion would be loan mix change.

HDFC Bank let go both loans and deposits in recent quarters due to irrational pricing.

We build in earnings compound annual growth rate of 18% over FY25-26E and tweak our earnings estimates, maintaining ‘Buy’ rating with unrevised target price of Rs 2000.

We standalone bank at 2.5 times FY26E price-book and add of subsidiaries.

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