2025-06-13-花旗集团-住房开发金融公司银行（HDBK）_HDFC银行（HDBK.BO）_管理层会议要点-上半年净息差面临阻力；周期平均实力保持；重申增长指引_11页_328kb

HDFC Bank Analysis Summary

Citi Research reaffirms its Buy recommendation on HDFC Bank (HDBK.BO) following management meetings. Key takeaways highlight concerns about NIM headwinds in H1 due to EBLR portfolio repricing, but levers are available to offset this in H2, with NIM expected to improve through the cycle. The bank reiterates its growth guidance for FY26, staying in-line with sector growth, driven by SME, business banking, unsecured lending, and retail segments. Factors like tax cuts, rising disposable income, and early festive season support consumption and growth. LDR moderation is gradual, targeted to pre-merger levels by FY27. Focus on acquiring new customers and scaling up CASA will aid deposit growth. Opex efficiency and improved branch productivity are expected. Allegations by LKMMT are dismissed as false, and legal action is planned. Target price for FY26 is Rs2,200, with a fair value based on SoTP analysis. Downside risks include merger costs, growth deceleration, and execution challenges.

Financial Highlights

• Net Profit and EPS data from 2023 to 2027 show steady growth with EPS ranging from Rs78.93 in 2023 to Rs111.63 in 2027, though FY25E sees a slight negative growth rate.
• P/E and ROE ratios indicate medium-term valuation, with ROE peaking at 17.0% in 2023 and dividend yield around 1.2-1.3%.

Investment Stance

• Buy-rated due to merger synergies, strong franchise potential, and valuation upside.
• Risks noted: Greater-than-expected merger costs, economic slowdown, and potential growth execution issues.

The report underscores HDFC Bank's position as India's largest private sector bank, emphasizing its growth trajectory and resilience amid regulatory and economic pressures.