HDFCBANK - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials Breakdown

Profitability

ROE: 14.3% and ROCE: 7.35% — solid returns, though ROCE is modest due to the capital-intensive nature of banking.

EPS: ₹45.3 — strong earnings base, with PAT rising to ₹18,155 Cr from ₹17,616 Cr (+12.2% QoQ).

Dividend Yield: 1.13% — consistent, though not a primary income source.

Balance Sheet & Leverage

Debt-to-Equity: 6.31 — typical for banks due to deposit liabilities; not a concern in this context.

Book Value: ₹338 — implies a P/B ratio of ~2.89, reasonable for a premium private sector bank.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 21.6 Above industry average (12.6) — reflects premium valuation

PEG Ratio 0.98 Fair — growth is reasonably priced

Intrinsic Value ~₹950–₹970 CMP is near fair value zone

Valuation is justified by scale, earnings consistency, and brand strength.

🏦 Business Model & Competitive Edge

Sector: Banking — retail, corporate, MSME, and treasury services.

Strengths

India’s largest private lender with ~9,700 branches and deep rural penetration.

High-quality loan book, strong CASA ratio, and robust digital infrastructure.

FII and DII holdings both up — signaling institutional confidence.

Motilal Oswal projects a 19% upside with a target of ₹1,150

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Challenges

ROCE is lower than peers like ICICI due to merger integration and capital deployment.

PEG ratio near 1 suggests growth is priced in.

MACD negative — short-term momentum is cooling.

📉 Technicals & Entry Zone

Current Price: ₹977

DMA 50: ₹977 | DMA 200: ₹936 — trading at short-term support

RSI: 53.6 — neutral zone

MACD: Negative — momentum softening

📌 Suggested Entry Zone: ₹940–₹970

A dip near the 200 DMA or intrinsic value would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, scale, and digital leadership make HDFC Bank a cornerstone for long-term portfolios.

Accumulate on dips: Ideal for investors seeking stable compounding from India’s banking growth story.

For deeper insights, check Motilal Oswal’s September picks featuring HDFC Bank or explore HDFC Bank’s full financials and valuation dashboard. Let me know if you'd like a peer comparison with ICICI Bank or Kotak Mahindra Bank.

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The Financial Express

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