HDFCB Clarifies on Merged Financials

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At its analyst meet, HDFCB clarified certain aspects relating to merged financials:

  • Transition to IRAC, credit policy harmonization, and creation of DTL reserve would impact BVPS by 5%.
  • Gains emanating from stake sale of Credila could cushion capital by 1.2%.
  • Creation of excess liquidity could affect Q2’24 NIM, although margins should bounce back in H2FY24E as credit growth picks up and liquidity is utilized.
  • FY24 NIM could contract YoY from 3.8% to 3.6%, however, as higher cost liabilities of HDFCL are replaced, NIM could enhance over FY24-26E from 3.6% to 3.8%.
  • Merged loans/deposits as at Q1’24 were Rs22.2/20.6trn suggesting a 13%/16% YoY growth.
  • While core earnings growth would be muted for FY24E (5.2% YoY) as NIM and loan growth normalize, core PAT may witness a 19.4% CAGR over FY24-26E.


Based on core RoA at 1.75% for FY26E (ICICIB 1.94%), HDFCB’s multiple has been tweaked from 3.0x to 2.8x but rolled forward to core Sep’25 ABV. The rating on HDFCB is retained as BUY with TP at Rs2,025.


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