HDFC Bank (HDFCB IN) – Q1FY27 Result Update – Slower recovery in quality of core revenue – BUY
Published on 19 Jul 2026
HDFCB saw a soft quarter as core PPoP missed PLe by 1.6% due to lower NII and fees. Beat on core PAT was driven by better opex and asset quality. Reported NIM trajectory has been sub-par over last 4 quarters due to faster corporate growth and fall in retail share YoY from 53% to 49%. This has led to faster fall in loan yields despite 50bps YoY reduction in cost of funds. We trim NIM for FY27/28E by avg. 7/3bps. Reducing opex to assets and benign asset quality remain a silver lining; bank expects further gain from productivity led by digital transformation while ECL impact may not be material. We tweak multiple to 2.1x from 2.2x. and trim TP to INR 1,040 from INR 1,100. Retain ‘BUY’.
