Hdfc Bank (HDB) AI Stock Analysis

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Hdfc Bank

(NYSE:HDB)

Rating:73Outperform

Price Target:―

HDFC Bank's overall score reflects strong financial health and positive technical momentum, balanced by fair valuation and mixed earnings call sentiment. Key strengths include robust income growth and stable credit metrics, while challenges arise from macroeconomic pressures and significant liabilities.

Positive Factors

Earnings

The net profit surpassed expectations, indicating strong financial performance.

Merger Synergies

Synergies from the merger with HDFC Limited are expected to outweigh execution risks, enhancing the ability to tap into lower cost funding and an enlarged network for cross-selling products.

Negative Factors

Asset Quality

Asset quality deteriorated as the gross NPA ratio rose to 1.42%, indicating a slight decline in asset quality.

Loan Growth

Key risks include a deterioration in asset quality and weaker than expected earnings due to slower loan growth.

Hdfc Bank (HDB) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$173.48B

Dividend Yield0.81%

Average Volume (3M)3.21M

Price to Earnings (P/E)22.4

Beta (1Y)0.34

Revenue Growth13.13%

EPS Growth0.54%

CountryUS

Employees214,521

SectorFinancial

Sector Strength82

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.81

Shares Outstanding2,551,864,000

10 Day Avg. Volume2,342,772

30 Day Avg. Volume3,205,847

Financial Highlights & Ratios

PEG Ratio54.45

Price to Book (P/B)3.07

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$79.50

Price Target Upside9.01% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Hdfc Bank Business Overview & Revenue Model

Company DescriptionHDFC Bank Limited (HDB) is one of India's leading private sector banks, headquartered in Mumbai, Maharashtra. Established in 1994, it operates in the financial services sector, providing a wide range of banking products and services to individual and corporate clients. The bank's core offerings include retail banking, wholesale banking, and treasury operations, supported by a comprehensive suite of digital banking solutions. HDFC Bank is known for its robust network of branches and ATMs across India, catering to millions of customers with innovative financial solutions.

How the Company Makes MoneyHDFC Bank generates revenue primarily through interest income from its lending activities, which includes personal loans, home loans, auto loans, and credit cards. Additionally, the bank earns non-interest income through fees and commissions from services such as wealth management, insurance, and investment products. HDFC Bank also benefits from its treasury operations, which involve managing its investment portfolio and trading in government securities, foreign exchange, and derivatives. The bank's profitability is further supported by its extensive branch network and digital platforms, which facilitate customer acquisition and retention. Strategic partnerships with fintech companies and adherence to regulatory frameworks also play a crucial role in its revenue generation.

Hdfc Bank Financial Statement Overview

Summary

HDFC Bank exhibits strong financial health with impressive income growth and solid profitability metrics. The balance sheet is stable with manageable leverage, although significant liabilities require vigilance. Cash flow analysis is constrained by missing recent data, yet historical trends indicate effective cash management.

Income Statement

Very Positive

HDFC Bank shows strong income growth with a robust revenue increase from 2023 to TTM. The Gross Profit Margin and Net Profit Margin are quite healthy, reflecting efficient operations with consistent profitability. The EBIT margin is substantial, indicating solid core operating performance. Revenue growth is notable, suggesting strong business momentum.

Balance Sheet

Positive

The balance sheet of HDFC Bank is solid, with a reasonable Debt-to-Equity ratio showing balanced leverage. The Return on Equity is impressive, highlighting efficient use of equity to generate profits. The Equity Ratio indicates a strong equity base relative to assets, though the high total liabilities could pose potential risks.

Cash Flow

Positive

HDFC Bank's cash flow situation is mixed. The absence of recent operating and free cash flow data limits the analysis. Historical data show positive free cash flow, but fluctuations in cash flow components suggest potential volatility. The Free Cash Flow to Net Income ratio in the past has been strong, indicating effective cash generation relative to net income.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
2.80T	2.54T	1.21T	1.02T	936.66B	791.75B
	Gross Profit
2.80T	2.54T	1.21T	1.02T	936.66B	791.75B
	EBIT
1.67T	1.02T	661.56B	518.56B	439.80B	365.75B
	EBITDA
501.01B	1.05T	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
695.80B	640.62B	495.45B	386.00B	325.98B	260.27B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.29T	7.15T	7.24T	5.99T	5.32T	4.13T
	Total Assets
40.30T	44.12T	25.76T	21.11T	17.98T	15.96T
	Total Debt
7.31T	8.09T	3.24T	2.19T	1.48T	1.47T
	Net Debt
5.02T	4.67T	878.07B	587.42B	443.06B	742.81B
	Total Liabilities
7.31T	36.23T	22.84T	18.60T	15.82T	14.07T
	Stockholders Equity
4.56T	4.56T	2.91T	2.50T	2.16T	1.89T
Cash Flow		Free Cash Flow
0.00	147.83B	433.58B	554.69B	903.97B	152.89B
	Operating Cash Flow
0.00	190.69B	477.20B	581.02B	921.78B	171.18B
	Investing Cash Flow
0.00	-3.67T	-4.39T	-3.30T	-2.52T	-2.15T
	Financing Cash Flow
0.00	3.35T	4.17T	2.91T	1.92T	1.85T

Hdfc Bank Technical Analysis

Technical Analysis Sentiment

Positive

Last Price72.93

Price Trends

50DMA

68.62

Positive

100DMA

64.54

Positive

200DMA

63.77

Positive

Market Momentum

MACD

1.17

Positive

RSI

56.91

Neutral

STOCH

86.81

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HDB, the sentiment is Positive. The current price of 72.93 is above the 20-day moving average (MA) of 72.46, above the 50-day MA of 68.62, and above the 200-day MA of 63.77, indicating a bullish trend. The MACD of 1.17 indicates Positive momentum. The RSI at 56.91 is Neutral, neither overbought nor oversold. The STOCH value of 86.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HDB.

Hdfc Bank Risk Analysis

Hdfc Bank disclosed 71 risk factors in its most recent earnings report. Hdfc Bank reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

Reforms to and replacement of IBORs and certain other rates or indices may adversely affect our reputation, business, financial condition and results of operations. Q1, 2022

The Scheme with HDFC Limited may be more difficult, costly or time-consuming than expected, and implementation may fail to realize the anticipated benefits of the merger and will expose us to incremental regulatory requirements. Q1, 2022

Uncertainty about the Proposed Transaction may adversely affect the relationships of the Parties with their respective investors, customers, business partners and employees, whether or not the Proposed Transaction is completed. Q1, 2022

Hdfc Bank Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HSBC	80 Outperform	$208.17B	11.02	10.83%	5.47%	-1.91%	-6.79%
WFC	78 Outperform	$247.51B	13.67	11.05%	2.05%	3.51%	16.51%
IBN	77 Outperform	$120.69B	20.02	17.89%	0.59%	22.15%	12.13%
HDB	73 Outperform	$173.48B	22.40	14.51%	0.81%	13.13%	0.54%
MUFG	65 Neutral	$154.55B	13.10	9.18%	1.72%	13.21%	-12.06%
C	64 Neutral	$142.19B	12.03	6.30%	2.91%	2.97%	87.82%
Sector *	64 Neutral	$12.78B	9.87	7.67%	17015.06%	12.34%	-5.99%

* Financial Sector Average

Performance Comparison

HDB

Hdfc Bank

72.93

17.33

31.17%

Citigroup

73.42

11.69

18.94%

HSBC

HSBC Holdings

59.34

17.77

42.75%

IBN

Icici Bank

33.81

7.23

27.20%

MUFG

Mitsubishi UFJ

13.81

4.19

43.56%

WFC

Wells Fargo

73.19

13.69

23.01%

Hdfc Bank Earnings Call Summary

Earnings Call Date:Apr 19, 2025

(Q3-2025)

% Change Since: 23.90%|

Next Earnings Date:Jul 21, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed performance. While the bank showed strong deposit growth and stable credit metrics, it faced significant macroeconomic challenges and pressures on margins and credit costs. The bank is strategically managing liquidity and costs, but external conditions and declining CASA ratios are constraints.

Q3-2025 Updates

Positive Updates

Strong Deposit Growth

The bank reported a robust deposit growth of about 15%, outpacing loan growth and gaining market share despite challenging macro conditions.

Stable Credit Metrics

Credit parameters like slippages and gross NPA remained resilient and stable, demonstrating the institution's strength.

Strategic Liquidity Management

The bank maintained a near-neutral liquidity position in Q3 with plans to optimize borrowing costs by extinguishing INR 44 billion in bonds.

Continued Branch Expansion

Added over 1,000 new branches year-on-year, maintaining a tight control on costs with a 7% year-on-year growth in costs.

Negative Updates

Tight Macro Environment

The bank is operating in a challenging macro environment with tight liquidity, moderating urban demand, volatility, and Indian rupee depreciation.

Reduced Net Interest Margin (NIM) Pressures

NIMs remained stable but are under pressure due to tight pricing and high deposit costs; CASA ratios are also declining.

Higher Credit Costs at HDB Financials

HDB Financials saw a sharp increase in credit costs from 1.8% to 2.5% due to increased provisions and Stage 3 asset classification.

Challenges in CASA Growth

The bank faced challenges in growing CASA ratios, affecting overall margins and cost of funds.

Company Guidance

During the HDFC Bank Q3 FY'25 earnings call, several key metrics and guidance were discussed. The bank reported a robust average deposit growth of about 15%, significantly outpacing its loan growth, which saw an 8% year-on-year increase in AUM advances. Despite a challenging macroeconomic environment marked by tight liquidity, the bank has maintained stable net interest margins (NIMs) and a cost growth of just 7% year-on-year, reflecting continued productivity gains. The bank's credit to deposit (CD) ratio has been a focal point, with ongoing efforts to normalize it, supported by a liquidity position that remained nearly neutral in Q3, with occasional peaks of negative INR 2 trillion to INR 2.5 trillion. The priority sector lending (PSL) targets were met at an aggregate level, though there is a minor shortfall in certain subcategories like smaller margin farmers. The bank's provisioning coverage ratio (PCR) stood at 68% overall but was higher at 71% excluding seasonal agricultural slippages. Additionally, the bank highlighted its strategic focus on maintaining a balanced growth trajectory with sufficient capital to capture market share as the macroeconomic environment stabilizes.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.