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HDFC Bank Limited
(HDFCBANK)
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Rating:70Outperform
Price Target:
₹855.00
▲(17.67% Upside)
Action:Upgraded
Date:07/21/26
The score is driven primarily by solid financial performance (strong cash generation and generally healthy profitability), supported by a constructive earnings call focused on deposit momentum, productivity, and growth initiatives despite near-term margin/funding mix pressure. Valuation is reasonable with a moderate dividend yield, while technicals are the main drag given the price remains below key longer-term moving averages and momentum indicators are subdued.
Positive Factors
Strong cash generation
Consistent, growing operating and free cash flow that roughly tracks net income strengthens earnings quality and funds lending, tech investment, and dividend/repayment capacity. Durable cash generation provides flexibility to refinance borrowings and absorb cyclical shocks over 2–6 months.
Negative Factors
Margin pressure from funding mix
Elevated non‑retail deposit rates and a higher-cost funding mix create persistent NIM pressure until funding is rebalanced. Given wholesale borrowing and short-term liabilities, margin recovery may be gradual, constraining return metrics over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, growing operating and free cash flow that roughly tracks net income strengthens earnings quality and funds lending, tech investment, and dividend/repayment capacity. Durable cash generation provides flexibility to refinance borrowings and absorb cyclical shocks over 2–6 months.
Read all positive factors
HDFC Bank Limited (HDFCBANK) vs. iShares MSCI India ETF (INDA)
Market Cap
₹11.10T
Dividend Yield2.18%
Average Volume (3M)2.27M
Price to Earnings (P/E)13.8
Beta (1Y)1.00
Revenue Growth1.75%
EPS Growth11.25%
CountryIN
Employees212,958
SectorGeneral
Sector StrengthN/A
IndustryBanks - Regional
Share Statistics
EPS (TTM)51.38
Shares Outstanding15,418,598,000
10 Day Avg. Volume2,264,787
30 Day Avg. Volume2,265,831
Financial Highlights & Ratios
PEG Ratio1.48
Price to Book (P/B)1.92
Price to Sales (P/S)2.27
P/FCF Ratio6.86
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
₹902.50Price Target Upside24.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)53.09
Revenue Forecast (FY)₹2.00T
HDFC Bank Limited Business Overview & Revenue Model
Company Description
HDFC Bank Limited stands as a prominent financial institution, delivering a diverse range of banking and financial services to both individual consumers and corporate clients across India, Bahrain, Hong Kong, and Dubai. Its operational structure i...
How the Company Makes Money
HDFC Bank primarily makes money through (1) net interest income and (2) non-interest income. Net interest income is earned from the spread between interest the bank receives on earning assets (such as retail loans, corporate/SME loans, and other i...
HDFC Bank Limited Earnings Call Summary
Earnings Call Date:Jul 18, 2026
(Q1-2027)
| Next Earnings Date:Oct 17, 2026
Earnings Call Sentiment Positive
The call highlighted multiple operational positives: better‑than‑usual Q1 deposit momentum, strong disbursement traction across wholesale, MSME and retail segments, improving per‑branch productivity, active participation in ECLGS with sizable disbursements, a large customer base (>100 million), and ongoing technology/GenAI investments to drive efficiency. Counterbalancing these are near‑term headwinds: margin pressure from elevated non‑retail funding and an ~11% borrowing mix, a lower CASA ratio (~34%) vs pre‑merger levels, PAT growth lagging balance‑sheet expansion, and a softer headline provision coverage ratio. Management conveyed confidence in provisioning adequacy for the upcoming ECL transition and expects funding and margin improvement to play out over time. Overall, the tone was constructive about franchise strength and mid‑term prospects while candid about short‑term margin and mix pressures.Positive Updates
Deposit momentum and market share gains
Management reported deposit growth in Q1 that is stronger than historical Q1 trends and said the bank continues to gain market share both on an incremental and stock basis. The bank is actively pursuing the FCNR window and expects meaningful mobilization in the coming months.
Negative Updates
Margin pressure and cost of funds
Margins remain under pressure; participants referenced NIMs around ~3.4% and management said cost of funds is the biggest margin opportunity. Non‑retail deposit rates remain elevated and borrowing share stands at ~11%, so margin recovery may be gradual. Management expects cost of funds benefits to play out over time and indicated potential long‑run margin improvement of ~40–50 bps vs prior year dynamics.
Read all updates
Q1-2027 Updates
Positive
Negative
Deposit momentum and market share gains
Management reported deposit growth in Q1 that is stronger than historical Q1 trends and said the bank continues to gain market share both on an incremental and stock basis. The bank is actively pursuing the FCNR window and expects meaningful mobilization in the coming months.
Read all positive updates
Company Guidance
Management guided that Q1 FY27 marked continued deposit and market‑share gains and stronger branch productivity (average INR 330 crore per branch vs INR 266 crore in 2023, with ~40% of branches <5 years), a customer base north of 100 million and a c.9,700‑branch network; they said advances will be “pressing the pedal” with wholesale up ~18% YoY, MSME business‑banking disbursements +22.3% and mortgage disbursements +14%, while retail mix is ~52% today (vs a ~60% aspiration). Key balance‑sheet metrics to watch: borrowing mix remains ~11% (with roughly INR 40–50k crore of borrowings maturing over the next couple of years), CASA has room to recover from post‑merger levels (pre‑merger ~38–40%), and system liquidity averaged INR 2.08 trillion in the quarter (peak INR 5.5 trillion, trough -INR 0.43 trillion). On margins and funding, management flagged cost‑of‑funds as the biggest margin lever (stabilization could shift margins by ~40–50 bps) and noted potential ~100–125 bps benefit when replacing high‑cost borrowings with retail time deposits; FCNR mobilization is underway (documentation/approvals done) with material flows expected in Jul‑Sep; ECL transition (effective 1 Apr 2027) is being provisioned for (current PCR ~66% overall, ~70% ex‑agri; unsecured coverage mid‑70s; standard asset provisioning ~40 bps; ECL floors: unsecured Stage‑1 1%, Stage‑2 5%). They also reiterated continued tech and GenAI investments (lighthouse programs moving to production) and an ongoing focus on improving turnaround times and productivity to drive efficiencies and growth.HDFC Bank Limited Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
67
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.96T | 4.95T | 4.19T | 3.52T | 1.98T | 1.60T |
| Gross Profit | 2.99T | 2.83T | 2.19T | 1.85T | 1.13T | 892.43B |
| EBITDA | 1.13T | 1.06T | 899.60B | 736.38B | 685.84B | 535.97B |
| Net Income | 790.13B | 760.26B | 673.51B | 622.66B | 495.45B | 386.00B |
Balance Sheet | ||||||
| Total Assets | 49.71T | 49.08T | 48.19T | 44.12T | 25.76T | 21.11T |
| Cash, Cash Equivalents and Short-Term Investments | 2.38T | 3.12T | 9.82T | 10.39T | 5.31T | 4.39T |
| Total Debt | 5.66T | 5.88T | 7.46T | 8.15T | 3.24T | 2.34T |
| Total Liabilities | 43.42T | 43.00T | 39.56T | 36.23T | 22.84T | 18.60T |
| Stockholders Equity | 6.06T | 5.86T | 7.68T | 6.95T | 2.91T | 2.50T |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 1.64T | 1.13T | 968.48B | 433.58B | 554.69B |
| Operating Cash Flow | 0.00 | 1.68T | 1.20T | 1.02T | 477.20B | 581.02B |
| Investing Cash Flow | 0.00 | -4.34T | -3.72T | -3.67T | -4.39T | -3.30T |
| Financing Cash Flow | 0.00 | 3.27T | 2.42T | 3.35T | 4.17T | 2.91T |
HDFC Bank Limited Risk Analysis
HDFC Bank Limited disclosed 71 risk factors in its most recent earnings report. HDFC Bank Limited 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 0 New Risks
HDFC Bank Limited Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | ₹9.28T | 16.86 | ― | 0.90% | 5.08% | 4.84% | |
70 Outperform | ₹11.10T | 13.79 | ― | 2.18% | 1.75% | 11.25% | |
70 Outperform | ₹8.90T | 10.27 | ― | 1.81% | 6.56% | 4.93% | |
69 Neutral | ₹4.04T | 20.44 | ― | 0.16% | 5.94% | 7.82% | |
62 Neutral | ₹3.76T | 13.71 | ― | 0.08% | 4.10% | -0.66% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
39 Underperform | ₹689.54B | 53.12 | ― | 0.17% | -6.52% | 31.06% |
* General Sector Average
IN:HDFCBANK
HDFC Bank Limited
709.70
-239.79
-25.25%
IN:AXISBANK
Axis Bank Limited
1,226.00
67.49
5.83%
IN:ICICIBANK
ICICI Bank Limited
1,322.50
-37.98
-2.79%
IN:INDUSINDBK
IndusInd Bank Ltd.
897.70
155.20
20.90%
IN:KOTAKBANK
Kotak Mahindra Bank Limited
417.60
5.72
1.39%
IN:SBIN
State Bank of India
960.70
111.96
13.19%
HDFC Bank Limited Corporate Events
HDFC Bank Publishes AGM Notice and E-Voting Details in Newspapers
Jul 12, 2026
HDFC Bank has announced that it has published newspaper advertisements in Financial Express and Navshakti providing notice and e-voting details for its 32nd Annual General Meeting. The disclosure has been made under Regulation 30 of the SEBI Listi...
HDFC Bank posts double-digit growth in loans and deposits for June quarter
Jul 4, 2026
HDFC Bank reported robust growth in its lending portfolio for the June 2026 quarter, with average advances under management rising about 10.8% year-on-year to ₹30.39 trillion and period-end advances under management up 12.4% to ₹31.27 ...
HDFC Bank’s External Legal Review Finds No Evidence Supporting Ex-Director’s Allegations
Jun 26, 2026
HDFC Bank has concluded an external legal review initiated after the resignation of former board member Atanu Chakraborty, which examined concerns he raised in his resignation statement. The review covered board and committee activities over the t...
HDFC Bank Raises USD 750 Million via IFSC-Issued Senior Unsecured Bonds
Jun 16, 2026
HDFC Bank, through its GIFT City IFSC Banking Unit, has completed the issuance of USD 750 million senior unsecured bonds, bolstering its access to offshore funding markets. The notes, expected to be rated investment grade by Moody’s and SP, ...
HDFC Bank Gets RBI Nod for Higher Group Stakes in ICICI Bank and Kotak Mahindra Bank
May 6, 2026
HDFC Bank has received approval from the Reserve Bank of India to hold an aggregate stake of up to 9.95% of the paid-up share capital or voting rights in ICICI Bank and Kotak Mahindra Bank, including holdings by its key group entities such as HDFC...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.