15 April 2023 3:15 PM GMT

Company Review

Top Indian Companies: HDFC Bank Ltd

Myfin Desk

Top Indian Companies: HDFC Bank Ltd


It is India's largest private sector bank by assets

HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai. It is India's largest private sector bank by assets and world's 10th largest bank by market capitalisation as of April 2021.

HDFC Bank was incorporated in 1994 as a subsidiary of the Housing Development Finance Corporation, with its registered office in Mumbai, Maharashtra, India.

Its first corporate office and a full-service branch at Sandoz House, Worli were inaugurated by the then Union Finance Minister, Manmohan Singh.

As of 30 June 2019, the bank's distribution network was at 5,500 branches across 2,764 cities. It has installed 430,000 POS terminals and issued 23,570,000 debit cards and 12 million credit cards in FY 2017. HDFC Bank is part of Nifty50 with a weightage of 9%.

Products and Services

HDFC Bank provides a number of products and services including wholesale banking, retail banking, treasury, auto loans, two-wheeler loans, personal loans, loans against property, consumer durable loan, lifestyle loan and credit cards. Along with this various digital products are Payzapp and SmartBUY.

Mergers and Acquisitions

HDFC Bank merged with Times Bank in February 2000.

In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank.

In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata Group, to operate a Pan-India umbrella entity for retail payment systems, similar to National Payments Corporation of India. In September 2021, the bank partnered with Paytm to launch a range of credit cards powered by the global card network Visa.

Subsidiaries and Divisions

Housing Development Finance Corporation, HDFC ERGO General Insurance Company, HDFC Life, HDFC Securities, HDFC AMC, HDB Financial Services

Listings and Shareholding

Shareholding Pattern of HDFC Bank

The Shareholding Pattern page of HDFC Bank Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Shareholding Pattern - HDFC Bank Ltd.

Holder's Name No of Shares % Share Holding

No O fShares 5542399476 100%

Promoters 1164625834 21.01%

Foreign Institutions 1691297026 30.52%

Banks Mutual Funds 676384109 12.2%

Central Govt 7041808 0.13%

Others 105541140 1.9%

General Public 508457307 9.17%

Financial Institutions 360936727 6.51%

GDR 1028115525 18.55%

FY23 Full year and 4th Quarter Results

HDFC Bank reported a 20.6 per cent jump in its consolidated net profit to Rs 12,594.5 crore for the March 2023 quarter, driven by a healthy core performance. For the entire fiscal, it reported a 20.9 per cent increase in the net profit at Rs 45,997.1 crore.

The city-headquartered lender, which is in the middle of merging its mortgage lending parent HDFC, reported a 19.8 per cent growth in the post-tax profit on a standalone basis at Rs 12,047.5 crore.

Its core net interest income rose 23.7 per cent to Rs 23,351.8 crore on the back of a 16.9 per cent jump in advances and the net interest margin being maintained at 4.1 per cent.

The other income increased to Rs 8,731.2 crore for the reporting quarter from Rs 7,637.1 crore in the year-ago period. All the components under this line showed an improvement, except trading and mark-to-market, where it reported losses of Rs 37.7 crore compared to a gain of Rs 47.6 crore in the year-ago period.

Amid the 'war for deposits' in the system, the lender has ducked the system-wide trend by reporting a 20.8 per cent growth in its base. Share of the low-cost current and savings account deposits stood at 44.4 per cent as of March 31, 2023.

Retail loans grew by 19.3 per cent, corporate and wholesale banking loans rose by a slower 12.6 per cent, while the nearly 30 per cent rise in commercial and rural banking advances, helping it report the overall loan growth number.

Retail and corporate advances are now evenly placed in the overall loan pie, having a 38 per cent share, while commercial and rural banking occupies the remaining 24 per cent.

From an asset quality perspective, the bank -- which is highly regarded for its hold over such issues -- reported an improvement, with the gross non-performing assets ratio improving to 1.12 per cent as of March 2023 against 1.17 per cent a year ago and 1.23 per cent at the end of the preceding December quarter.

The overall provisions were reduced to Rs 2,685.37 crore for the reporting quarter on a standalone basis against Rs 3,312.35 crore in the year-ago period and Rs 2,806.44 crore in the preceding quarter.

Its overall capital adequacy came at 19.3 per cent as of March 2023, up from 18.9 per cent in the year-ago period.

The bank's overall number of branches stood at 7,821 as of March 31, of which 52 per cent were in areas it classifies as semi-urban and rural, while the rest are in metros and urban areas.

It added over 6,000 employees during the quarter and over 31,000 to take its overall strength to 1,73,222 as of March 2023. The cost to net revenue inched up to 42 per cent against 40 per cent in the quarter-ago period and 38 per cent in the year-ago period.

The overall rise in operating expenditure came at 32.6 per cent compared to a 21 per cent growth in the net revenue.

Its board of directors has recommended a dividend of Rs 19 per share for FY23 against Rs 15.5 per share in the year-ago period.

Among its subsidiaries, the broking arm witnessed a dip in its March quarter net profit at Rs 193.8 crore from Rs 235.6 crore, while HDB Financial Services' net profit rose 27.7 per cent to Rs 545.5 crore.

HDFC Bank said it is in the process of seeking remaining approvals and permissions for the merger with HDFC after the sanction received from the National Company Law Tribunal on March 17.

Brokerage Outlook

HDFC bank has reported good performance during Q3FY22 in terms of business growth and asset quality. However, lower operating growth was bit disappointing which was mainly due to lower fee income. Bank continue to build digital capabilities to capture the growth.

Arihant Capital, brokerage, tweak its estimates marginally and upgrade our rating on the stock to Buy from Accumulate with a revised TP of INR 1,910 (earlier INR 1,935), implying 3.6x FY24E P/ABV.


HDFC Bank has identified 3 key areas:

1- Affordable Housing, -

2- Social respoinsibility towards Society,

3- Responsible lending.