Stock overview
| Ticker | HDFCBANK |
| Sector | Banking and Financial Services |
| Market Cap | ₹ 9,11,000 crores (Large cap) |
| CMP (Current Market Price) | ₹ 1,736.50 |
| 52-Week High/Low | ₹ 1,880/ ₹ 1,363.55 |
| P/E Ratio | 20.4 (vs Industry Avg. of 23.2) |
| Dividend Yield | 1.2% |
| Beta | 0.85 (Low volatility relative to NIFTY 50) |
About HDFC Bank
HDFC Bank, India’s largest private bank, is a leader in innovation, trust, and seamless banking. Since 1994, it has redefined finance with digital excellence, personalised services, and a vast network. From savings to business growth, millions trust HDFC Bank as their financial partner.
Key drivers of growth
1. Strong fundamentals
- HDFC Bank continues to dominate the Indian banking sector with an unparalleled track record of growth and operational efficiency.
- The bank has a CAGR of 19% in net profit over the last 5 years.
2. Expansion plans:
- Branch additions and increased penetration in rural/semi-urban areas are expected to drive growth.
- Continued focus on digital transformation, with 90% of transactions happening via digital channels.
3. Economic tailwinds:
- India’s GDP growth (~6.5% projected for FY25) and rising credit demand create a conducive environment for HDFC Bank.
4. Merger synergies:
- After its merger with HDFC Ltd., the bank has benefited from a diversified loan book, improved housing loan penetration, and a larger customer base.
Recent Financial Performance (Q3 FY25)
| Metric | Q3 FY 25 | Q3 FY 24 | YoY Growth |
| Net Interest Income (NII) | ₹ 30,650 cr | ₹28,470 cr | +7.7% |
| Net Profit | ₹ 16,740 cr | ₹ 16,370 cr | +2.2% |
| Advances | ₹ 26.2 lakh cr | ₹ 24.4 lakh c | +7.6% |
| Deposits | ₹ 24.5 lakh cr | ₹ 21.1 lakh cr | +7.6% |
| Net Interest Margin (NIM) | 3.4% | 3.4% | 0 bps |
| Gross NPA | 1.20% | 1.10% | -10 bps |
Highlights:
- Healthy loan growth driven by retail and MSME segments.
- Asset quality remains strong, with gross NPAs at a low 1.20%.
- Marginal improvement in NIM indicates efficient management of interest spreads.
Competitor analysis for HDFC Bank
Key financial metrics (FY 24 snapshot)
| Bank | Market Cap (₹ cr) | P/E Ratio | NIM | Gross NPA | RoE |
| HDFC Bank | 9,11,000 | 20.4 | 3.4% | 1.20% | 16.5% |
| ICICI Bank | 7,60,000 | 21.1 | 4.4% | 1.11% | 16.8% |
| Axis Bank | 3,90,000 | 18.9 | 4.0% | 1.35% | 15.2% |
| Kotak Mahindra Bank | 4,40,000 | 26.5 | 4.2% | 1.19% | 13.5% |
*Green-colored font denotes above-average performance
*Red-colored font denotes below-average performance
Valuation insights
When analyzing HDFC Bank from valuation standpoint, we’re looking at two main questions:
- Is it cheap or expensive compared to how it’s traded in the past—or to other banks?
- How much could it earn in the future, and what does that imply for today’s stock price?
As per Relative valuation:
- HDFC Bank trades at a P/E of 20.4, slightly lower than the bank’s historical average of 22.2, suggesting there might be a small discount right now.
- Price-to-Book Ratio (P/B): 3.6x, This indicates you’re paying 3.6 times the bank’s “book value” (essentially, its net assets). A higher P/B often reflects a strong financial foundation and good returns on equity—two things HDFC Bank is known for.
And, from a DCF Analysis:
Based on HDFC Bank’s future cash flow forecast, its intrinsic value estimate is ₹1,850. There’s room for the stock to grow by about 13.6%
- Assumptions taken:
- Loan Book CAGR: 18% (FY25-FY30) The bank’s loans are expected to grow at 18% a year.
- Terminal Growth Rate: After FY30, HDFC Bank’s earnings growth should stabilise around 5%.
WACC: 10.5%: Blended interest rate, covering both the cost of borrowing money (debt at 7.5% post-tax) and what shareholders expect to earn (Cost of Equity:12%).
Key risks to watch
- Regulatory Risks: Changes in RBI policies or regulatory compliance may impact profitability.
- Macroeconomic Factors: High inflation or slowing GDP growth could impact credit demand.
- Integration Challenges: The HDFC Ltd. merger, while synergistic, could present short-term execution risks.
Union Budget 2025 impact
Stronger Credit Demand – Higher infrastructure spending and capex allocation could drive corporate and MSME loan growth.
Stable Retail Lending – Tax reliefs for individuals will boost retail loan demand, which augurs well for HDFC Bank.
Robust Deposit Growth – HDFC Bank’s strong deposit base positions it well to fund rising credit needs.
RBI Monetary Policy outlook
🔹 Rate Cut or Status Quo? – The RBI is expected to reduce rates which is likely to boost liquidity and loan demand.
🔹 Impact on Margins – Lower rates could ease borrowing costs, supporting HDFC Bank’s net interest margins (NIMs).
Technical outlook on HDFC Bank share
- Short-Term View: The stock is trading above its 200-day moving average (1,580), indicating bullish momentum.
- RSI: 60 (Neutral-to-Bullish).
- Support Levels: ₹ 1,610
- Resistance Levels: ₹ 1,680
HDFC Bank stock recommendation
Current Stance: Buy with a target price of ₹ 1,850 (12-month horizon).
Why buy now :
Consistent financial performance with high growth visibility.
Strong competitive position in the Indian banking sector.
Potential synergies from the HDFC Ltd. merger.
Portfolio Fit: Ideal for conservative investors seeking stability and consistent returns in India’s fast-growing banking sector.If you found this helpful and want regular stock trade calls, check out my StockGro profile here: https://stockgro.onelink.me/vNON/6m6ykj0d
