HDFCBANK - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | HDFCBANK | Market Cap | 14,18,670 Cr. | Current Price | 922 ₹ | High / Low | 1,020 ₹ |
| Stock P/E | 19.4 | Book Value | 350 ₹ | Dividend Yield | 1.19 % | ROCE | 7.35 % |
| ROE | 14.3 % | Face Value | 1.00 ₹ | DMA 50 | 961 ₹ | DMA 200 | 959 ₹ |
| Chg in FII Hold | -0.71 % | Chg in DII Hold | 0.93 % | PAT Qtr | 18,654 Cr. | PAT Prev Qtr | 18,641 Cr. |
| RSI | 34.3 | MACD | -14.4 | Volume | 1,05,34,218 | Avg Vol 1Wk | 3,27,01,847 |
| Low price | 831 ₹ | High price | 1,020 ₹ | PEG Ratio | 0.88 | Debt to equity | 6.28 |
| 52w Index | 48.2 % | Qtr Profit Var | 11.5 % | EPS | 47.6 ₹ | Industry PE | 15.8 |
💹 Core Financials: HDFC Bank maintains strong profitability with ROE at 14.3% and quarterly PAT of ₹18,654 Cr. (slightly higher than previous ₹18,641 Cr.). ROCE at 7.35% is modest compared to peers, reflecting capital intensity typical of banking. Debt-to-equity ratio of 6.28 is high, but expected in the banking sector due to its lending model. Dividend yield of 1.19% provides moderate income. EPS at ₹47.6 shows consistent earnings power.
📊 Valuation Indicators: Current P/E of 19.4 is slightly above the industry average of 15.8, suggesting mild overvaluation. Book value of ₹350 against CMP of ₹922 implies a P/B ratio of ~2.63, which is reasonable for a leading private bank. PEG ratio of 0.88 indicates fair valuation relative to growth. Intrinsic value appears close to CMP, suggesting limited undervaluation.
🏢 Business Model & Competitive Advantage: HDFC Bank is India’s largest private sector bank with strong retail and corporate banking presence. Its competitive advantage lies in brand trust, wide branch network, digital banking capabilities, and consistent asset quality. Diversified loan book and strong CASA deposits provide stability and recurring income.
💰 Entry Zone Recommendation: Considering DMA 50 at ₹961 and DMA 200 at ₹959, the stock is trading below these averages, showing weakness. A favorable entry zone would be ₹850–₹900 during corrections. Current levels are near support but not deeply undervalued.
📈 Long-Term Holding Guidance: HDFC Bank remains a fundamentally strong institution with consistent earnings, strong brand, and growth potential in India’s expanding financial sector. Long-term investors can hold, while new investors should accumulate gradually on dips for better risk-reward.
Positive
- Strong quarterly PAT of ₹18,654 Cr. with stable earnings.
- ROE of 14.3% reflects healthy profitability.
- PEG ratio of 0.88 indicates fair valuation relative to growth.
- Strong brand trust and wide distribution network.
Limitation
- ROCE at 7.35% is modest compared to peers.
- P/E ratio (19.4) is slightly higher than industry average (15.8).
- Dividend yield of 1.19% is relatively low.
Company Negative News
- Decline in FII holdings (-0.71%) signals reduced foreign investor confidence.
- Stock trading below DMA 50 and DMA 200 indicates technical weakness.
Company Positive News
- Increase in DII holdings (+0.93%) reflects strong domestic institutional support.
- Quarterly profit variation of 11.5% shows earnings resilience.
- Strong CASA deposits and digital banking adoption.
Industry
- Banking sector benefits from India’s economic growth and rising credit demand.
- Industry P/E at 15.8 suggests peers trade at lower valuations.
- Competition from ICICI Bank, Axis Bank, and SBI keeps pricing pressure high.
Conclusion
⚖️ HDFC Bank is a fundamentally strong private sector bank with consistent earnings, strong brand equity, and growth potential. Valuations are slightly above industry averages, but long-term investors can hold. New investors should look for entry around ₹850–₹900 to optimize returns.
Would you like me to also prepare a peer comparison HTML snippet against ICICI Bank and Axis Bank so you can see relative strengths and weaknesses side by side?