HDFC Bank: Strong Financial Performance and Strategic Merger Drive Buy Rating

Lim Rui Wen, an analyst from DBS, maintained the Buy rating on Hdfc Bank (HDB – Research Report). The associated price target remains the same with $79.50.

Lim Rui Wen has given his Buy rating due to a combination of factors including HDFC Bank’s strong financial performance and strategic advantages from its merger with HDFC Limited. The bank’s net profit for the fourth quarter of FY25 exceeded expectations, showing a year-on-year and quarter-on-quarter increase, which indicates robust financial health.
Additionally, the merger with HDFC Limited is expected to bring significant synergies, such as access to lower-cost funding and an expanded network for cross-selling opportunities. Despite a temporary decrease in return on equity post-merger, the long-term benefits are anticipated to enhance the bank’s share price. The management’s strategy to improve the loan-to-deposit ratio and the bank’s superior asset quality compared to peers further support the positive outlook, justifying the Buy rating.

Rui Wen covers the Financial sector, focusing on stocks such as OCBC, UOB, and Hdfc Bank. According to TipRanks, Rui Wen has an average return of 13.1% and a 79.17% success rate on recommended stocks.