HDFC Bank — Research Report (Scrollable)

00

Company Overview

▢ excluded

HDFC Bank overview▢ excluded

Incorporated in 1994, HDFC Bank is India's largest private sector bank by balance sheet size. On July 1, 2023, the Bank reached a historic milestone by successfully completing its amalgamation with its promoter, Housing Development Finance Corporation Limited (HDFC Limited). This transformational merger turned HDFC Bank into a comprehensive financial services conglomerate, adding a massive home loan portfolio to its offerings and integrating several key financial subsidiaries under the "HDFC Bank Group" umbrella.

The Bank boasts a massive distribution network, operating over 9,455 branches across India (with 51% located in semi-urban and rural areas) and an industry-leading digital footprint, where 97% of all financial transactions are executed through digital channels.

Core business segments▢ excluded

HDFC Bank caters to a diverse customer base—from individuals and small farmers to multinational corporations—across four primary segments:

Retail

Retail Banking — Serves individuals, salaried professionals, small businesses (like kirana stores), and NRIs. Offers savings/current accounts, personal/business loans, credit/debit cards, digital wallets, and home loans.

Wholesale

Wholesale Banking — Targets large corporates, MNCs, public sector enterprises, and financial institutions. One-stop shop for working capital/term loans, trade finance, cash management, investment banking, and corporate cards.

Comm&Rural

Commercial and Rural Cluster — Critical growth engine for Priority Sector Lending (PSL) and financial inclusion. Serves MSMEs, small/marginal farmers, agriculture-allied businesses (dairy, horticulture), healthcare, and commercial transport.

Treasury

Treasury — Manages the Bank's liquidity, statutory reserve requirements, asset-liability mismatches, investments in securities, and foreign exchange/derivative operations.

Key subsidiaries▢ excluded

The merger with HDFC Limited significantly expanded the Bank's subsidiary portfolio, enabling comprehensive financial solutions across the entire customer lifecycle (pay, save, invest, borrow, insure, and trade):

HDBFSL

HDB Financial Services Limited — Non-deposit-taking NBFC catering to underserved segments. Offers consumer and enterprise loans, asset finance, micro-lending, and BPO/collection services.

HSL

HDFC Securities Limited — Leading retail broking firm serving millions of customers with investment products across equities, mutual funds, and debt instruments.

Life

HDFC Life Insurance Company Limited — Listed life insurance provider offering individual and group plans spanning protection, pension, savings, investment, annuity, and health categories.

ERGO

HDFC ERGO General Insurance Company Limited — General insurance provider offering motor, health, travel, home, personal accident, cyber, corporate, and rural (crop/cattle) insurance.

AMC

HDFC Asset Management Company Limited — Investment manager for HDFC Mutual Fund (one of India's largest). Provides savings/investment products, portfolio management, and AIFs to retail and institutional clients.

Revenue Mix — Q1 FY26 (Gross Segment Revenue)▢ excluded

Retail Banking

₹75,191 Cr · 47.9%

Wholesale Banking

₹44,790 Cr · 28.5%

Treasury

₹28,283 Cr · 18.0%

Other Banking Operations

₹8,694 Cr · 5.5%

Total Gross Segment Revenue: ₹1,56,958 Cr

01

Executive Summary & Overview

▢ excluded

Investment thesis▢ excluded

01

Merger drag is transitional, not permanent. ROE fell from 16.96% (FY23) to 14.09% (FY26) and NIM compressed from 3.52% to 2.94% — but EPS grew every year (₹41.22→₹49.39). Recovery to 14.5% ROE expected by FY29 as costly legacy HDFC Ltd borrowings are repaid. Trigger: NIM inflection as deposit mix improves.

02

Subsidiary value under-priced. HDFC Life (50.21%), AMC (52.37%), HDB Financial (74.12%), ERGO (50.33%), Securities (94.01%) contribute ₹120/share; after 15% holdco discount = SOTP floor ₹830. Trigger: HDB Financial IPO.

03

Share-price de-rating creates asymmetric entry. ₹10,000 invested 5 years ago = ₹9,982 today vs ₹19,085 for ICICI and ₹22,063 for SBI. Franchise quality intact; upside ~36% to RI-derived target of ₹1,060.

Catalysts & risks▢ excluded

Top catalysts

• Legacy HDFC Ltd borrowing repayment → NIM recovery
• HDB Financial IPO unlocking subsidiary value
• Deposit-led funding improvement + operating leverage

Key risks

• Integration execution failure prolonging NIM compression
• Asset-quality deterioration (NPA shock → ROE ~12%)
• ESG/governance overhang (chairman resignation, Dubai matter)

Snapshot ▢ excluded

Quick metrics

Mkt Cap	₹11,52,822 Cr (US$121.2 bn)	52-Wk High / Low	₹1,020 / ₹727
Avg Daily Value	₹2,413 Cr	RoA / RoE FY26	1.87% / 14.09%
NIM (Q4 FY26)	3.53%	GNPA / NNPA	1.15% / 0.38%
P/BV FY26	2.07×	Dividend Yield	1.74%
1Y Return	−24%	5Y Return	0%
10Y Return	+10%
Shareholding (Mar-26): FII 44.05% · DII 40.14% · Public 15.64% · Promoter 0.00%

02

Financial Performance

▢ excluded₹ bn · Consolidated

Income statement▢ excluded

Key Income Statement Metrics & Ratios (Standalone) · ₹ in Cr

Particulars	FY21	FY22	FY23	FY24	FY25
Net Interest Income (NII)	64,879.57	72,009.59	86,842.22	1,08,532.48	1,22,670.09
Pre-Provision Operating Profit (PPOP)	57,361.83	64,077.30	70,404.97	94,387.46	1,00,127.49
Provisions & Contingencies	15,702.85	15,061.83	11,919.66	23,492.15	11,649.43
NIM Trajectory (on Total Assets)	4.10%	4.00%	4.10%	3.53%	3.48%
NIM Trajectory (on Interest-Earning Assets)	4.34%	4.20%	4.33%	3.74%	3.67%
EPS — Standalone (₹/share)	56.58	66.80	79.25	85.83	88.29
EPS YoY Growth	17.85%	18.06%	18.64%	8.30%	2.87%
EPS — Consolidated (₹/share)	57.88	68.77	82.64	90.42	92.81
EPS YoY Growth (Consolidated)	16.13%	18.82%	20.17%	9.41%	2.64%

Profit & Loss statement▢ excluded

All figures are in ₹ in Crore.

Particulars	FY21	FY22	FY23	FY24	FY25
Interest Earned	1,20,858.23	1,27,753.12	1,61,585.54	2,58,340.58	3,00,517.04
↳ YoY Growth	—	+5.7%	+26.5%	+59.9%	+16.3%
Other Income	25,204.89	29,509.90	31,214.83	49,241.00	45,632.28
Total Income	1,46,063.12	1,57,263.02	1,92,800.37	3,07,581.58	3,46,149.32
↳ YoY Growth	—	+7.7%	+22.6%	+59.5%	+12.5%
Interest Expended	55,978.66	55,743.53	74,743.32	1,49,808.10	1,77,846.95
Operating Expenses	32,722.63	37,442.19	47,652.08	63,386.02	68,174.88
Total Expenditure (excluding provisions & contingencies)	88,701.29	93,185.72	1,22,395.40	2,13,194.12	2,46,021.83
Operating Profit	57,361.83	64,077.30	70,404.97	94,387.46	1,00,127.49
Provisions and Contingencies (excluding tax)	15,702.85	15,061.83	11,919.66	23,492.15	11,649.43
↳ YoY Growth	—	−4.1%	−20.9%	+97.1%	−50.4%
Profit before Tax	41,658.98	49,015.47	58,485.31	70,895.31	88,478.06
Tax Expense	10,542.46	12,054.12	14,376.60	10,083.03	21,130.70
Net Profit	31,116.52	36,961.35	44,108.71	60,812.28	67,347.36
↳ YoY Growth	—	+18.8%	+19.3%	+37.9%	+10.7%

Note: The financial results for the years ended March 31, 2024, and March 31, 2025, include the operations of erstwhile HDFC Limited (which amalgamated with and into HDFC Bank effective July 1, 2023). Hence, the figures for FY24 and FY25 are substantially scaled up and are not directly comparable to the pre-merger figures of FY21, FY22, and FY23.

Balance sheet [Selected] ▢ excluded

₹ Cr · Standalone Balance Sheet & Key Metrics (Absolute Values & Percentages)

Metric	FY21	FY22	FY23	FY24	FY25
Total Deposits (Baseline)	₹ 13,33,720.87 Cr	₹ 15,58,003.03 Cr	₹ 18,83,394.64 Cr	₹ 23,79,786.27 Cr	₹ 27,14,714.89 Cr
CASA Deposits / Ratio	₹ 6,14,568.71 Cr (46.08%)	₹ 7,49,942.43 Cr (48.13%)	₹ 8,35,988.86 Cr (44.38%)	₹ 9,08,762.98 Cr (38.18%)	₹ 9,44,560.23 Cr (34.79%)
Total Advances (Baseline)	₹ 11,32,836.63 Cr	₹ 13,68,820.93 Cr	₹ 16,00,585.90 Cr	₹ 24,84,861.52 Cr	₹ 26,19,608.62 Cr
Advances Mix: Retail	₹ 5,27,586.00 Cr (~46.6%)	~₹ 5,99,608.00 Cr (43.8%)	~₹ 6,17,713.00 Cr (38.6%)	~₹ 12,62,173.00 Cr (~50.8%)	₹ 13,75,769.00 Cr (52.5%)
Advances Mix: Wholesale / Corp.	₹ 5,83,925.00 Cr (~51.5%)	~₹ 7,37,896.00 Cr (53.9%)	~₹ 8,23,254.00 Cr (51.4%)	~₹ 10,87,084.00 Cr (43.7%)	₹ 10,82,413.00 Cr (41.3%)
Asset Quality: GNPA	₹ 15,086.00 Cr (1.32%)	₹ 16,140.96 Cr (1.17%)	₹ 18,019.03 Cr (1.12%)	₹ 31,173.32 Cr (1.24%)	₹ 35,222.64 Cr (1.33%)
Asset Quality: NNPA	₹ 4,554.82 Cr (0.40%)	₹ 4,407.68 Cr (0.32%)	₹ 4,368.43 Cr (0.27%)	₹ 8,091.74 Cr (0.33%)	₹ 11,320.43 Cr (0.43%)
Provision Coverage (Specific)	₹ 10,531.18 Cr (69.81%)	₹ 11,733.28 Cr (72.69%)	₹ 13,650.60 Cr (75.76%)	₹ 23,081.58 Cr (74.04%)	₹ 23,902.21 Cr (67.86%)
CRAR (Total Capital base)	₹ 2,12,546.30 Cr (18.79%)	₹ 2,55,734.50 Cr (18.90%)	₹ 3,05,564.85 Cr (19.26%)	₹ 4,64,002.82 Cr (18.80%)	₹ 5,20,042.52 Cr (19.55%)
Fixed Assets (Net Block)	₹ 4,909.31 Cr	₹ 6,083.66 Cr	₹ 8,016.53 Cr	₹ 12,022.78 Cr	₹ 13,655.40 Cr

Metric	FY21	FY22	FY23	FY24	FY25
Total Segment Assets	Not Found	Not Found	Not Found	₹ 38,54,268.99 Cr	₹ 38,92,900.34 Cr
Consolidated Assets: Retail	₹ 5,21,997 Cr	₹ 6,19,468 Cr	₹ 8,08,136 Cr	₹ 15,33,890.27 Cr (39.8%)	₹ 15,28,135.60 Cr (39.3%)
Consolidated Assets: Wholesale	₹ 6,28,731 Cr	₹ 8,08,136 Cr	₹ 9,17,628 Cr	₹ 9,56,136.34 Cr (24.8%)	₹ 9,66,071.31 Cr (24.8%)
Fixed Assets (Net Block)	Not Found	₹ 6,283.28 Cr	₹ 8,282.56 Cr	₹ 12,603.76 Cr	₹ 16,359.04 Cr
CASA / GNPA / NNPA / CRAR	N/A*	N/A*	N/A*	N/A*	N/A*

Cash flow▢ excluded

Values in ₹ '000 · Annual

Particulars	Year ended March 31, 2025	Year ended March 31, 2024
Cash flows from operating activities
Profit before income tax	8,84,780,560	7,08,953,051
Adjustments for: Depreciation, Provisioning, Amortisations, etc.	1,49,584,773	1,90,034,713
Adjustments for changes in investments, advances, deposits & other assets/liabilities	5,91,164,780	(3,50,400,742)
Direct taxes paid (net of refunds)	(1,73,757,076)	(1,98,437,376)
Net cash flows from operating activities	14,51,773,037	3,50,149,646
Cash flows from investing activities
Purchase / Sale of fixed assets (Net)	(31,082,460)	(37,388,898)
Investment / Sale of investment in subsidiaries (Net)	(11,177,695)	95,006,717
Dividend from subsidiaries	21,870,101	13,323,911
Net cash flow (used in) / from investing activities	(20,390,054)	70,941,730
Cash flows from financing activities
Proceeds from share capital / warrants	63,464,973	84,425,444
Decrease in other borrowings	(11,44,291,825)	(2,22,750,573)
Dividend paid during the year	(1,48,261,930)	(84,044,222)
Net cash flow used in financing activities	(12,29,088,782)	(2,22,369,351)
Effect of fluctuation in foreign currency translation reserve	1,938,330	1,012,629
Net increase in cash and cash equivalents	2,04,232,531	1,99,734,654
Cash and cash equivalents at the beginning of the year	21,91,474,181	19,37,650,831
Cash and cash equivalents acquired on amalgamation	—	54,088,696
Cash and cash equivalents at the end of the year	23,95,706,712	21,91,474,181

Particulars	Year ended March 31, 2025	Year ended March 31, 2024
Cash flows from operating activities
Consolidated profit before income tax and after minority interest	93,594.13	75,184.14
Adjustments for: Depreciation, Provisioning, Amortisations, etc.	24,048.03	16,434.26
Adjustments for changes in investments, advances, deposits & policyholders' funds	29,308.36	(49,706.22)
Direct taxes paid (net of refunds)	(19,708.68)	(22,842.84)
Net cash flows from operating activities	1,27,241.84	19,069.34
Cash flows from investing activities
Purchase / Sale of fixed assets (Net)	(3,975.17)	(4,186.90)
Investment / Sale of investment in subsidiaries (Net)	124.53	9,500.67
Net cash flow (used in) / from investing activities	(3,850.64)	5,313.77
Cash flows from financing activities
Proceeds from share capital, minority interest & tier capital	9,411.38	12,014.20
Redemption of Tier 1 and Tier 2 capital instruments	(500.00)	(230.00)
Decrease in other borrowings	(97,062.73)	(7,342.84)
Dividend paid during the year	(14,826.19)	(8,404.42)
Net cash flow used in financing activities	(1,02,477.54)	(3,983.06)
Effect of fluctuation in foreign currency translation reserve	199.73	104.94
Net increase in cash and cash equivalents	21,113.39	20,504.99
Cash and cash equivalents at the beginning of the year	2,28,834.51	1,97,147.81
Cash and cash equivalents acquired on amalgamation	—	11,181.71
Cash and cash equivalents at the end of the year	2,49,947.90	2,28,834.51

03

Valuation Frameworks

▢ excludedSOTP · P/ABV

SOTP build▢ excluded

Component	Stake	Basis	Val/sh ₹
Core bank (standalone)	—	FY26 EPS ₹48.51 × P/E 15×	727.65
Subsidiaries (attributable mkt value)
HDFC Life Insurance	50.21%	Mkt val ₹1,23,812 Cr	~40
HDFC Asset Management	52.37%	Mkt val ₹1,08,110 Cr	~37
HDB Financial Services	74.12%	Mkt val ₹53,499 Cr	~26
HDFC Securities	94.01%	Mkt val ₹15,000 Cr	~9
HDFC ERGO General Ins.	50.33%	Mkt val ₹25,000 Cr	~8
Total subsidiary value/sh			120.21
Holdco discount on subs		15% (base)	−18.03
SOTP fair value (base)			830
Bear ₹730 (P/E 13×, 17% disc.) · Bull ₹929 (P/E 17×, 13% disc.) · 12-mo RI target: ₹1,060

Two-variable sensitivity — Residual Income (g × Ke)▢ excluded

Intrinsic value (₹/share) = f(terminal growth g × cost of equity Ke) — Base: g=6.0%, Ke=9.14%

g ↓ / Ke →	8.5%	9.0%	9.5%	10.0%	10.5%	11.0%
4.0%	1,177	1,046	957	892	842	802
4.5%	1,275	1,106	995	916	857	811
5.0%	1,403	1,177	1,038	942	872	820
5.5%	1,580	1,264	1,088	974	893	834
6.0%	1,844	1,372	1,145	1,012	922	855

CAPM Ke base = 6.5% Rf + 0.48β × (12%−6.5%) = 9.14%. Bear Ke 11.0%, Bull Ke 9.0%. Values above CMP (₹749) in most combinations.

P/BV model — Book Value per Share projection▢ excluded

ROE Method

BVPS_t+1 = BVPS_t × (1 + ROE × r)

Retention ratio r = ~75%

ROE '2714.0% ROE '2814.0% ROE '2914.5%

Why these ROE assumptions? Dividend payout has historically been ~25%, implying ~75% retention. ROE is held at 14.0% for FY27–28, then steps up to 14.5% in FY29 as HDFC Ltd merger synergies fully materialise — driven by improved funding mix, deposit accretion, operating leverage from scale, and normalization of the enlarged balance sheet.

Book Value per Share — Historical & Projected (₹)

	Mar-22	Mar-23	Mar-24	Mar-25	Mar-26	Mar-27E	Mar-28E	Mar-29E
BVPS (₹)	222	258	294	329	363	401	443	491
ROE × Retention	—	16.19%	13.79%	11.74%	10.40%	10.50%	10.50%	10.88%

▶ Show balance sheet support data (₹ Cr)

	Mar-22	Mar-23	Mar-24	Mar-25	Mar-26
Total Assets	21,22,934	25,30,432	40,30,194	43,92,110	49,08,041
Total Liabilities	18,75,608	22,40,995	35,73,798	38,70,321	43,26,527
Book Value	2,47,326	2,89,437	4,56,396	5,21,789	5,81,514
Shares outstanding (Cr)	1,112	1,120	1,552	1,588	1,603

Price Scenarios — BVPS × P/BV Multiple (₹)

▼ Bear Case

P/BV holds at 2.0×

Year	P/BV	Price
Mar-27E	2.0×	₹802
Mar-28E	2.0×	₹886
Mar-29E	2.0×	₹982

◆ Now / Base

P/BV stays at 2.08× (current low)

Year	P/BV	Price
Mar-27E	2.08×	₹834
Mar-28E	2.08×	₹921
Mar-29E	2.08×	₹1,022

▲ Bull Case

P/BV re-rating to 2.6×

Year	P/BV	Price
Mar-27E	2.2×	₹882
Mar-28E	2.4×	₹1,063
Mar-29E	2.6×	₹1,277

Bull case re-rating is supported by improving ROE trajectory, normalization of post-merger profitability, strong asset quality, and sustained double-digit growth in book value.

Sensitivity — Target Price at Mar-29E (₹)

P/BV multiple	Target Price
1.9×	933
2.0×	982 ← Bear
2.1×	1,031
2.08×	1,022 ← Base
2.2×	1,080
2.3×	1,130
2.4×	1,179
2.5×	1,228
2.6×	1,277 ← Bull

P/E model — EPS projection via ROE × BVPS▢ excluded

ROE × BVPS Method

EPS_t = ROE_t × BVPS_t

BVPS projections and ROE assumptions are shared with the P/BV model above (BVPS'27: 401, '28: 443, '29: 491; ROE: 14% / 14% / 14.5%).

How EPS is projected EPS is derived by multiplying the projected BVPS (from the ROE retention model) by the forward ROE assumption. This ties EPS growth directly to book value compounding rather than standalone earnings forecasts, ensuring consistency between the P/BV and P/E frameworks. The current P/E of 15.25× serves as the base — below the historical average — reflecting the post-merger re-rating opportunity.

EPS — Historical & Projected (₹/share)

	Mar-22	Mar-23	Mar-24	Mar-25	Mar-26	Mar-27E	Mar-28E	Mar-29E
EPS (₹)	34.31	41.22	42.16	46.26	49.39	56.12	62.01	71.21
Source	Reported					ROE×BVPS	ROE×BVPS	ROE×BVPS

Price Scenarios — EPS × P/E Multiple (₹)

▼ Bear Case

P/E holds at 15×

Year	P/E	Price
Mar-27E	15×	₹842
Mar-28E	15×	₹930
Mar-29E	15×	₹1,068

◆ Now / Base

P/E stays at 15.25× (current)

Year	P/E	Price
Mar-26	15.25×	₹753
Mar-27E	15.25×	₹856
Mar-28E	15.25×	₹946
Mar-29E	15.25×	₹1,086

▲ Bull Case

P/E re-rates to 22×

Year	P/E	Price
Mar-27E	17×	₹954
Mar-28E	19×	₹1,178
Mar-29E	22×	₹1,567

Sensitivity — Target Price at Mar-29E vs P/E Multiple (₹)

P/E multiple	Target Price
14×	997
15×	1,068 ← Bear
16×	1,139
15.25×	1,086 ← Base
17×	1,211
18×	1,282
19×	1,353
20×	1,424
21×	1,495
22×	1,567 ← Bull

04

Risk & Capital Structure

▢ excluded

Asset quality▢ excluded

Financial Year	GNPA (%)	NNPA (%)	PCR (%)	Fresh Additions to NPAs / Slippages (₹ in Crore)	Provision for NPAs / Credit Cost Basis (₹ in Crore)	NIM (on Total Assets / Working Funds)
FY25	1.33%	0.43%	67.86%	₹ 31,977.43	₹ 12,803.11	3.48%
FY24	1.24%	0.33%	74.04%	₹ 27,980.95	₹ 10,764.66	3.53%
FY23	1.12%	0.27%	75.76%	₹ 24,536.31	₹ 13,558.03	4.10% (4.08% exact ratio)
FY22	1.17%	0.32%	72.69%	₹ 26,861.43	₹ 12,500.86	4.00%
FY21	1.32%	0.40%	69.81%	₹ 16,040.01	₹ 11,450.19	4.10%

ROE stress scenarios▢ excluded

Justification: Higher NPAs ⇒ Higher provisions ⇒ Lower ROE.

Scenario assumptions — ROE FY27–29

Scenario	ROE FY27–29
Base	14.00%
Mild Stress	13.00%
Severe Stress	12.00%

Historical ROE % & NNPA — context for stress calibration

	Mar-17	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24	Mar-25	Mar-26
ROE %	17.95%	17.87%	16.50%	16.40%	16.61%	16.66%	16.96%	16.88%	14.30%	14.09%
NNPA %	0.33	0.40	0.39	0.36	0.40	0.32	0.27	0.33	0.43	0.42

Capital & liquidity▢ excluded

Slippages and LCR Trajectory (FY21 to FY25)

Financial Year	Slippages (Fresh NPA Additions)	Average Liquidity Coverage Ratio (LCR)
FY25	₹ 31,977.43 Crore	119.04%
FY24	₹ 27,980.95 Crore	117.35%
FY23	₹ 24,536.31 Crore	115.51%
FY22	₹ 26,861.43 Crore	121.16%
FY21	₹ 16,040.01 Crore	137.95%

Risk → mitigation▢ excluded

Integration & execution risk. Merger raised balance-sheet complexity. Sustained ROE compression from 14%→12% could reduce RI valuation by ~20–30%. Mitigated by branch expansion and deposit gathering.

Asset-quality (credit) risk. Economic slowdown or geopolitical shock (Iran–Israel conflict, crude oil) could lift slippages. GNPA 0.4%→1.2% would drag ROE to ~12%. Historical NPA range FY17–26: 0.27%–0.43%.

ESG & reputational risk. Non-executive chairman resignation raises governance concerns. "Dubai matter" adverse development could invite regulatory scrutiny and weaken stakeholder confidence.

Interest-rate risk. Escalating geopolitical tension may keep RBI stance tight, pressuring funding costs. A 10–20 bps NIM contraction could weigh on earnings and compress valuation.

05

Industry & Macro

▢ excludeduniversal gap — added

Sector overview / TAM▢ excluded

Banking-sector backdrop

System credit growth 12–14%; private-bank share gains continue. Formalisation + digital rails expand addressable deposit pool. HDFC Bank's borrowings actively reduced from ₹6.62 lakh Cr to ₹5.48 lakh Cr as legacy HDFC Ltd debt is repaid — a key driver of NIM recovery. DII holding risen every quarter of FY26 (35.77%→40.14%) while FII has eased (48.84%→44.05%), indicating domestic-led ownership rotation.

Regulatory backdrop▢ excluded

Tailwinds

• Repo-cut cycle → funding-cost relief
• Priority-sector flexibility via PSLCs
• Digital-banking unit guidelines

Headwinds

• Draft LCR norms (higher run-off factors)
• Project-finance provisioning draft
• Deposit-insurance premium revision

Cycle positioning▢ excluded

Mid-cycle: credit costs near trough (0.35% Q4 FY26), NIM trough visible at 2.94% (FY26). Rate cycle turning — repo-cut cycle to provide funding-cost relief. Merger integration enters recovery phase; ROE expected at 14.0% FY27–28 and 14.5% FY29. Bear/Base/Bull RI intrinsic values: ₹622 / ₹1,063 / ₹1,222. Valuation only collapses toward current price (₹749) when Ke is stressed to 10.5–11% range.

06

Peer Comparison

▢ excludedtwo-table format

Valuation multiples (FY26)▢ excluded

Bank	CMP (₹)	P/E (×)	Div Yld	Mkt Cap (₹ Cr)	BV (₹)
HDFC Bank	747.05	15.1	1.74%	11,49,748	377.8
ICICI Bank	1,262.10	16.7	0.87%	9,04,569	503.3
Axis Bank	1,272.30	15.0	0.08%	3,95,961	687.2
Kotak Mahindra	377.45	19.8	0.13%	3,75,579	182.1
IDBI Bank	73.08	8.5	2.87%	78,611	63.8
Federal Bank	304.15	17.3	0.39%	74,986	162.5
Yes Bank	23.30	20.8	0.00%	73,129	16.3
SBI	NA	10.8	1.77%	NA	NA

Operational KPIs (FY26E)▢ excluded

Bank	RoA (5yr avg)	RoE	RoCE	NIM	GNPA	NNPA	PCR	CASA
HDFC Bank	1.87%	13.8%	7.04%	3.53%	1.15%	0.38%	67.9%	34.1%
ICICI Bank	1.98%	16.1%	7.20%	4.32%	1.44%	0.33%	75.8%	38.6%
Axis Bank	1.45%	13.2%	6.24%	~3.9%	1.23%	0.37%	72%	41.0%
Kotak Mahindra	2.45%	11.2%	6.93%	~4.7%	1.20%	0.25%	~79%	43.0%
SBI	~1.02%	15.4%	6.13%	n/a	1.49%	0.39%	74.4%	39.5%

Flexi Cap MF Holdings — HDFC Bank (Shares held)▢ excluded

Top 10 Flexi Cap funds by HDFC Bank shareholding · Source: AMFI / fund disclosures · ▲/▼/— = change vs prior month

Fund Name	Fund Manager	Apr-26	Mar-26	Feb-26	Jan-26	MoM (Apr vs Mar)
Parag Parikh Flexi Cap Fund-Reg(G)	Rajeev Thakkar	14,50,07,203	14,02,47,203	11,69,15,576	11,59,15,576	▲ +47,60,000
HDFC Flexi Cap Fund(G)	Amit Ganatra	8,86,34,120	8,79,41,295	8,20,00,000	8,20,00,000	▲ +6,92,825
Kotak Flexicap Fund(G)	Harsha Upadhyaya	3,95,00,000	3,95,00,000	3,95,00,000	3,95,00,000	— Unchanged
Franklin India Flexi Cap Fund(G)	R. Janakiraman	1,86,69,284	1,86,69,284	1,86,69,284	1,74,69,284	— Unchanged
UTI Flexi Cap Fund-Reg(G)	Ajay Tyagi	1,54,81,600	1,54,81,600	1,54,81,600	1,56,38,000	— Unchanged
SBI Flexicap Fund-Reg(G)	Anup Upadhyay	1,27,49,960	1,27,49,960	1,49,49,960	1,49,49,960	— Unchanged
DSP Flexi Cap Fund-Reg(G)	Bhavin Gandhi	1,20,17,612	97,14,287	71,95,928	64,16,902	▲ +23,03,325
Aditya Birla SL Flexi Cap Fund-Reg(G)	Harish Krishnan	1,20,00,000	1,20,00,000	1,10,55,796	1,10,55,796	— Unchanged
Canara Rob Flexi Cap Fund-Reg(G)	Shridatta Bhandwaldar	1,16,84,680	1,15,84,680	1,14,59,680	1,11,84,680	▲ +1,00,000
ICICI Pru Flexicap Fund	Rajat Chandak	1,15,80,304	1,15,80,304	1,05,80,304	1,05,80,304	— Unchanged

₹10,000 invested · price return only (no dividends)▢ excluded

Period	HDFC Bank	ICICI Bank	Axis Bank	Kotak Bank	SBI	Nifty 50
10 years	₹25,573	₹55,354	₹23,055	₹24,636	₹46,451	₹28,442
5 years	₹9,982	₹19,085	₹16,860	₹10,470	₹22,063	₹14,800
1 year	₹7,755	₹8,456	₹10,475	₹9,184	₹11,758	₹9,460

07

Sector-Specific KPIs

▢ excluded

Banking KPI grammar▢ excluded

Branches (Mar-26)9,689+234 YoY

ATMs (Mar-26)21,172+33 YoY

Digital txn mix (FY25)97%▲

CASA ratio (Mar-26)34.1%deposit mix

08

Latest Quarterly Update

▢ excludedQ4FY26

Result snapshot vs estimates▢ excluded

All absolute figures are in ₹ Billions.

Metric	Q1 FY26 (Ended Jun 30, 2025)	Q4 FY25 (Ended Mar 31, 2025)	QoQ Growth	Q1 FY25 (Ended Jun 30, 2024)	YoY Growth
Net Interest Income (NII)	₹ 314.38	₹ 320.66	-1.96%	₹ 298.37	+5.37%
Operating Expenses	₹ 174.30	₹ 175.60	-0.74%	₹ 166.20	+4.87%
Pre-Provision Operating Profit (PPoP)	₹ 357.34	₹ 265.37	+34.66%	₹ 238.85	+49.61%
Provisions & Contingencies	₹ 144.40	₹ 31.90	+352.66%	₹ 26.00	+455.38%
Profit Before Tax (PBT)	₹ 212.90	₹ 233.40	-8.78%	Not Found	-
Profit After Tax (PAT)	₹ 181.60	₹ 176.20	+3.06%	₹ 161.80	+12.24%
GNPA (%)	1.40%	1.33%	+7 bps	1.33%	+7 bps
NNPA (%)	0.47%	0.43%	+4 bps	0.39%	+8 bps
NIM (Core on Total Assets)	3.35%	3.48%	-13 bps	Not Found	-

Concall highlights▢ excluded

Operational (Q4 FY26)

• NIM (IEA basis): 3.53% · NIM (total assets): 3.38%
• GNPA improved to 1.15% from 1.33% a year earlier
• Credit cost: 0.35% · Standalone borrowings cut ₹6.62 lakh Cr → ₹5.48 lakh Cr

Guidance / strategy

• HDB Financial Services IPO progressing
• Branch network expanded to 9,689 (+234 YoY); ATMs 21,172
• 97% of financial transactions digitally enabled (FY25)

10

ESG & Corporate Governance

▢ excluded

Top Management Personnel▢ excluded

Name	Designation	Short Biography
Mr. Sashidhar Jagdishan	Managing Director and Chief Executive Officer, HDFC Bank	Holds a Bachelor's degree in Physics from the University of Mumbai, is a qualified Chartered Accountant, and earned a Master's degree in Economics of Money, Banking, and Finance from the University of Sheffield. Having joined HDFC Bank in 1996, he has held critical roles including Business Head of Finance and Chief Financial Officer (CFO). He took charge as the MD and CEO in October 2020.
Mr. Kaizad M Bharucha	Deputy Managing Director, HDFC Bank	A career banker with over 39 years of experience, Mr. Bharucha has been an integral part of HDFC Bank since its inception in 1995. He holds a B.Com degree from the University of Mumbai. In his current role, he provides strategic direction to the Assets franchise and oversees Corporate Social Responsibility, ESG, and the Inclusive Banking Initiatives Group.
Mr. V. Srinivasa Rangan	Executive Director, HDFC Bank	Joined HDFC in 1986 after qualifying as a Chartered Accountant. A rank-holding CA and an Associate member of the Institute of Chartered Accountants of India, he also holds a degree in Commerce. Throughout his career, he has handled vast responsibilities including retail and wholesale lending, mobilization of deposits, and risk management, previously serving as the Senior General Manager – Treasury.
Mr. Abhijit Singh	Group Head – BaaS, Digital Ecosystems and International Banking, HDFC Bank	With over 25 years of extensive background in emerging technology, fintech, and digital transformation, Mr. Singh holds an MBA in Finance from Jamnalal Bajaj Institute of Management Studies and an Engineering degree from the University of Mumbai. Before joining HDFC Bank, he served as the COO and CTO at OakNorth Bank in London and previously held senior positions at ICICI Bank.
Mr. Ajay Agarwal	Company Secretary, Group Head – Secretarial and Group Oversight, HDFC Bank	A seasoned governance professional with over 28 years of experience. A Fellow Member of the Institute of Company Secretaries of India and a Law Graduate, he is an expert in corporate governance, securities law, and regulatory compliance. He was associated with the erstwhile HDFC Limited for 23 years and played a pivotal role in its merger with HDFC Bank.
Mr. Anil Bhavnani	Group Head – Transportation and Infrastructure Finance Group, HDFC Bank	A veteran banker with over 30 years of experience, Mr. Bhavnani is responsible for extending customized products to commercial vehicles, construction equipment, and the infrastructure space. He holds an honors degree from Kolkata University. Since joining HDFC Bank in 2003, he has successfully held various leadership roles across Retail Assets, Wholesale Banking, and Retail Branch Banking.
Mr. Anjani Rathor	Group Head – Digital Banking, Customer Experience, Data & Process Excellence	Brings over 25 years of diverse experience across banking, telecom, consulting, and aviation. He joined HDFC Bank in 2020 as Chief Digital Officer. Holding a B.Tech degree from IIT Kharagpur and a Post Graduate Diploma in Management from IIM-Calcutta, he is responsible for driving digital adoption across all banking channels and leveraging data for customer engagement.
Mr. Arun Mediratta	Group Head – Retail Branch Banking and Alternate Banking Channel & Partnerships, HDFC Bank	Has over 30 years of experience in the banking sector, including 27 years with HDFC Bank. An alumnus of the University of Lucknow, he specializes in Retail Branch Banking, managing large-scale operations, and strategic planning. He has held key leadership roles focused on driving top-line income and ensuring compliance across the bank's operational geographies.

For the complete management team, visit: HDFC Bank – Management Team ↗

Governance review▢ excluded

• Non-executive Chairman resigned — governance and succession risk flagged as a key investment risk
• "Dubai matter": adverse development could damage reputation and invite regulatory scrutiny
• Bank continues to invest in governance frameworks, cybersecurity and digital infrastructure
• Board independence and RPT details: NA (not available in source)

Climate & lending▢ excluded

• Climate stress on mortgage collateral, carbon intensity of lending book, green-finance share of advances: NA (not available in source document)

11

Self Research Points

▢ excludedyour notes

Datewise research log▢ excluded

📎 Attach images Add a dated observation, channel check, or chart clip.

12

Glossary

▢ excludedreference

Banking & Regulatory Terms▢ excluded

Abbreviation	Full Form	Definition
CASA	Current Account Savings Account	Low-cost deposit base; higher CASA ratio indicates cheaper funding and stronger liability franchise.
NIM	Net Interest Margin	Net interest income as a % of average earning assets; core measure of a bank's lending profitability.
NII	Net Interest Income	Difference between interest earned on loans/investments and interest paid on deposits/borrowings.
GNPA	Gross Non-Performing Assets	Total value of loans classified as non-performing before provisions; key asset quality indicator.
NNPA	Net Non-Performing Assets	GNPA net of provisions held; reflects the residual credit risk on the bank's books.
PCR	Provision Coverage Ratio	Provisions held as a % of GNPA; higher PCR signals conservative provisioning and balance sheet strength.
SLR	Statutory Liquidity Ratio	Mandatory portion of NDTL that banks must hold in liquid assets (G-secs etc.).
CRR	Cash Reserve Ratio	Mandatory cash reserves held with RBI as a % of NDTL; impacts money supply and liquidity.
CRAR / CAR	Capital to Risk-weighted Assets Ratio / Capital Adequacy Ratio	Total regulatory capital ÷ risk-weighted assets; Basel III minimum is 11.5% for Indian banks.
LCR	Liquidity Coverage Ratio	High-quality liquid assets ÷ 30-day net cash outflows under stress; RBI minimum is 100%.
NSFR	Net Stable Funding Ratio	Available stable funding ÷ required stable funding; measures longer-term structural liquidity.
CD Ratio	Credit-Deposit Ratio	Total loans ÷ total deposits; indicates how aggressively a bank is deploying deposits into credit.
ALM	Asset Liability Management	Framework to manage mismatches between assets and liabilities in terms of maturity, rate, and currency.
MCLR	Marginal Cost of Funds-based Lending Rate	Benchmark lending rate computed from marginal cost of funds; replaced the base rate system in 2016.
EBLR	External Benchmark-based Lending Rate	Lending rate linked to an external benchmark (e.g. RBI repo rate); mandatory for retail & MSME loans since Oct 2019.
PSL	Priority Sector Lending	RBI-mandated lending to agriculture, MSME, housing etc.; 40% of ANBC for domestic banks.
PSLC	Priority Sector Lending Certificate	Tradable certificate allowing banks to buy/sell PSL compliance on the RBI platform.
SARFAESI	Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act	Enables banks to recover dues by enforcing security without court intervention.
IBC	Insolvency and Bankruptcy Code	2016 legislation providing time-bound resolution of insolvency for companies and individuals.
NCLT	National Company Law Tribunal	Adjudicating authority for IBC proceedings; handles admission, approval and liquidation orders.
SMA	Special Mention Account	Early-warning category for loans overdue 1–90 days; SMA-0, SMA-1, SMA-2 sub-classifications.
ECL	Expected Credit Loss	Ind AS 109 / IFRS 9 provisioning framework based on probability-weighted forward-looking credit losses.
RWA	Risk-Weighted Assets	Assets adjusted by credit/market/operational risk weight; denominator in capital adequacy ratios.
LTV	Loan-to-Value Ratio	Loan amount as a % of collateral's market value; key underwriting metric for secured loans.
PD / LGD / EAD	Probability of Default / Loss Given Default / Exposure at Default	Basel II/III credit risk parameters used to compute expected and unexpected losses under the IRB approach.
NBFC	Non-Banking Financial Company	RBI-regulated entity providing financial services but not holding a banking license; cannot accept demand deposits.
HFC	Housing Finance Company	NBFC specialising in mortgage loans; regulated by NHB / RBI post 2019.
MFI	Microfinance Institution	Entity providing small collateral-free loans to low-income borrowers; governed by RBI's microfinance framework.
UPI	Unified Payments Interface	NPCI-operated real-time payments system enabling instant bank-to-bank transfers via mobile.
RTGS	Real Time Gross Settlement	Continuous real-time interbank funds transfer for high-value transactions (minimum ₹2 lakh).
NEFT	National Electronic Funds Transfer	Batch-based interbank electronic transfer; operates 24×7 since Dec 2019.
KYC	Know Your Customer	Regulatory process for verifying customer identity to prevent fraud and money laundering.
AML / CFT	Anti-Money Laundering / Countering Financing of Terrorism	Compliance framework to detect and prevent illicit financial flows; governed by PMLA 2002 in India.

Financial Metrics & Ratios▢ excluded

Abbreviation	Full Form	Definition
ROA	Return on Assets	PAT ÷ Average total assets; measures how efficiently a bank generates profit from its asset base.
ROE	Return on Equity	PAT ÷ Average shareholders' equity; core profitability metric for equity investors. Target: 15–18% for top-tier banks.
RORWA	Return on Risk-Weighted Assets	PAT ÷ Average RWA; risk-adjusted profitability metric preferred under Basel framework.
PAT	Profit After Tax	Net profit after deducting all expenses, provisions, and tax; the bottom-line earnings figure.
PBT	Profit Before Tax	Operating profit after provisions but before income tax.
PPOP	Pre-Provision Operating Profit	Operating profit before loan-loss provisions; measures core earnings power independent of the credit cycle.
EPS	Earnings Per Share	PAT ÷ weighted average diluted shares outstanding; basis for P/E valuation.
BVPS	Book Value Per Share	Net worth ÷ shares outstanding; basis for P/BV valuation.
DPS	Dividend Per Share	Total dividends declared divided by shares outstanding.
CIR	Cost-to-Income Ratio	Total operating expenses ÷ net revenue (NII + other income); lower is better. HDFC Bank targets ~40%.
Slippage	Fresh NPA Addition Rate	Standard assets that degraded into NPA during a period; expressed as % of opening loans.
Credit Cost	Loan Loss Provision Rate	Provisions for bad loans ÷ average loans; reflects the annual cost of credit risk. ~0.5–0.7% for HDFC Bank.
AUM	Assets Under Management	Total market value of assets managed on behalf of clients; key metric for wealth/AMC subsidiaries.
CAGR	Compound Annual Growth Rate	Geometric mean growth rate over a multi-year period; smooths year-to-year volatility.
YoY / QoQ	Year-on-Year / Quarter-on-Quarter	Growth compared to the same period last year / the immediately preceding quarter.
TTM / LTM	Trailing Twelve Months / Last Twelve Months	Rolling 12-month financial period ending on the most recent quarter date.
bps	Basis Points	1 bps = 0.01%; standard unit for changes in interest rates, spreads, and margins.
ppts	Percentage Points	Absolute change in a percentage value (e.g. NIM rising from 3.5% to 3.7% = +20 bps = +0.2 ppts).
LAP	Loan Against Property	Secured loan against self-occupied or commercial property; sits between home loans and unsecured credit on the risk spectrum.
WC / CC / OD	Working Capital / Cash Credit / Overdraft	Short-term revolving credit facilities for business operations; core of the wholesale banking book.
TL	Term Loan	Fixed-tenure loan with scheduled repayments; contrast with revolving facilities.
HL / AL / PL / GL	Home Loan / Auto Loan / Personal Loan / Gold Loan	Standard retail lending product categories.

Valuation & Market Terms▢ excluded

Abbreviation	Full Form	Definition
P/E	Price-to-Earnings Multiple	Market price ÷ EPS; earnings-based relative valuation. Dominant for insurance and fee-heavy businesses.
P/BV	Price-to-Book Value Multiple	Market price ÷ BVPS; primary valuation metric for banks. HDFC Bank historically trades at 2.5–4×.
SOTP	Sum-of-the-Parts	Values each business segment separately and sums them; used for banks with significant subsidiaries.
RI	Residual Income Model	Equity value = book value + PV of excess returns (ROE – CoE) × equity; well-suited for banks.
DDM	Dividend Discount Model	Intrinsic value = PV of all future dividends; relevant for mature dividend-paying banks.
DCF	Discounted Cash Flow	Intrinsic value = PV of future free cash flows; less common for banks due to difficulty defining "free cash flow".
CoE	Cost of Equity	Required return demanded by equity investors; derived via CAPM. Discount rate in RI and DDM models.
CAPM	Capital Asset Pricing Model	CoE = Risk-free rate + β × Equity Risk Premium; standard model for cost of equity estimation.
ERP	Equity Risk Premium	Excess return of equities over the risk-free rate; India ERP typically 5–6%.
Beta (β)	Systematic Risk Coefficient	Sensitivity of a stock's returns to market returns; β > 1 implies amplified market moves.
CMP	Current Market Price	Last traded price of the stock on an exchange.
TP	Target Price	Analyst's 12-month intrinsic value estimate; basis for BUY / HOLD / SELL recommendation.
MC	Market Capitalisation	CMP × total shares outstanding; total market value of equity.
EV	Enterprise Value	MC + Net Debt; total firm value. Less commonly used for banks vs. industrials.
ESG	Environmental, Social & Governance	Non-financial factors assessing sustainability and ethical impact; increasingly integrated into institutional mandates.
FII / FPI	Foreign Institutional Investor / Foreign Portfolio Investor	Overseas entities investing in Indian listed securities; subject to SEBI FPI Regulations 2019.
DII	Domestic Institutional Investor	Indian mutual funds, insurance companies, and pension funds investing in listed equities.
MF	Mutual Fund	Pooled investment vehicle regulated by SEBI; major source of domestic equity demand.
NAV	Net Asset Value	Per-unit value of a mutual fund scheme = (Total assets – liabilities) ÷ units outstanding.
TAM	Total Addressable Market	Maximum revenue opportunity in a given market; used in sector sizing analysis.
NTM / FWD	Next Twelve Months / Forward	Forward-looking 12-month period; used for forward P/E and P/BV estimates.
Concall	Earnings Conference Call	Post-result call where management discusses financials, strategy, and outlook with analysts and investors.
FY / Q	Financial Year / Quarter	India's financial year runs April–March. Q1FY26 = Apr–Jun 2025. FY26E = estimate for year ending March 2026.

HDFC Bank Ltd

Company Overview

Executive Summary & Overview

Financial Performance

Valuation Frameworks

Risk & Capital Structure

Industry & Macro

Peer Comparison

Sector-Specific KPIs

Latest Quarterly Update

ESG & Corporate Governance

Self Research Points

Glossary