HDFC Bank Ltd. share price target

We recommend a BUY on the stock with a TP of Rs 1,685/share, implying an upside of 10% from the CMP.

HDFCB: Realigning business dynamics in 4Q to improve profitability

After the Q3 miss, HDFCB largely ticked all the boxes in Q4 – delivering betterthan-expected deposit growth (over Rs1.7trn QoQ), positively surprising on the
margin front (over 3bps QoQ) to 3.63% despite the sharp fall in LDR to 104%
and accelerated branch expansion. HDFCB utilized HDFC Credila’s stake sale
gains of Rs73bn and tax reversal due to favorable court order to shore-up
contingent provision buffer (over Rs109bn QoQ) to 1.1% of loans.

HDFCB delivered a healthy quarter, with NIMs improving 4bp QoQ and the
CD ratio declining 6% QoQ to 104%. PAT (adj. for one-offs) and NII both
stood in line with our estimates.

Apart from strong deposits growth and subdued loan growth, which were already communicated, key highlights from HDFC Bank’s (HDFCB) Q4FY24 results include: 1) sharp reduction in borrowing (down 10% QoQ); 2) 3–4bps QoQ rise in NIM

HDFC Bank reported broadly in-line performance in Q4FY24. Numbers on a y-o-y numbers are not
comparable as this is the third quarter reported after the merger. NII at Rs. 29,077 crore (up 2% q-o-q) was in line with expectations driven by stable NIM of 3.4% (marginally improved by 4 bps q-o-q) and net loan growth of 1.6% q-o-q.