At a Glance
HDFC Bank is India’s second-largest bank by assets, the largest private lender, and now a ₹15 lakh crore giant post-merger. Over the last 5 years, it has grown revenue, profit, and even its number of shareholders like it’s running a mutual fund. But after the HDFC Ltd merger chaos and negative margins showing up in FY24… is the beast tired or just recharging?
🧾 1. What Does HDFC Bank Even Do?
In short? Everything that makes your CA proud and your savings account poor.
HDFC Bank’s Portfolio:
- 👨💼 Retail Banking: Loans, cards, and the constant SMSes for pre-approved loans
- 🏢 Corporate Banking: The real money — working capital, MNC accounts, SME goldmines
- 🧮 Treasury Ops: Making money from your money
- 📈 HDB Financial Services (soon to IPO): NBFC arm now becoming its own drama
The July 2023 merger with HDFC Ltd made it:
- India’s largest private bank by AUM, deposit base, and balance sheet
- Also India’s most complicated balance sheet post-merger 💀
📊 2. The 5-Year Financial Glow-Up
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | ROE (%) | Dividend (%) |
|---|---|---|---|---|---|
| FY21 | 1,28,552 | 31,857 | 57.74 | 16% | 11% |
| FY22 | 1,35,936 | 38,151 | 68.62 | 17% | 23% |
| FY23 | 1,70,754 | 46,149 | 82.44 | 17% | 23% |
| FY24 | 2,83,649 | 65,446 | 84.33 | 17% | 23% |
| FY25 | 3,36,367 | 73,440 | 92.51 | 15% | 24% |
📈 5Y Revenue CAGR: 22%
📈 5Y Profit CAGR: 21%
🧨 EPS Grew: From ₹58 → ₹92.5
🏦 3. Merger Mania: HDFC Ltd + HDFC Bank = ???
Remember when your finance bro said “MERGERS ARE VALUE ACCRETIVE”?
Yeah… except this one came with:
- 📉 Margin Compression: -15% financing margin in FY24 post-merger
- 🧾 Other Income > Net Profit: ₹1.3 lakh Cr in FY25!
- 💣 Contingent Liabilities: ₹24 lakh crore (!!!) — enough to fund a small European country
So while HDFC Bank became bigger, it also became messier.
📉 4. Competition: Still the Alpha?
| Bank | Market Cap (₹ Cr) | P/E | Net Profit (Qtr) | ROE (%) | NIM (%) |
|---|---|---|---|---|---|
| HDFC Bank | ₹15.04L Cr | 21.2 | ₹19,285 Cr | 14.5% | ~3.5% |
| ICICI Bank | ₹10.16L Cr | 19.9 | ₹14,354 Cr | 15.2% | ~4.4% |
| Kotak Bank | ₹4.42L Cr | 23.0 | ₹4,933 Cr | 12.6% | ~5% |
| Axis Bank | ₹3.79L Cr | 13.5 | ₹7,509 Cr | 13.1% | ~4.1% |
📌 Verdict:
- ICICI catching up on profits
- HDFC Bank remains the safest bet for boomers, but lost its aggressive edge
- NIM has slipped post-merger → lower profitability on the same ₹
📈 5. Shareholding Pattern & Popularity
| Category | FY21 | FY25 |
|---|---|---|
| Promoter | 25.7% | 0% (after merger) |
| FIIs | 32% → | 48.3% ✅ |
| DIIs | 27% → | 35.7% ✅ |
| Public | 14.6% → | 15.8% |
🧠 TL;DR:
- Promoter holding went to zero post-merger
- FIIs & DIIs now hold 83%+ combined — full foreign love story
- Over 38 lakh retail shareholders, more fans than most IPL teams
💸 6. Fair Value (FV) Range
Assumptions:
- FY26E EPS = ₹105
- P/E range: 19x to 24x (historic band)
| Scenario | EPS (FY26E) | P/E | FV |
|---|---|---|---|
| Bear | ₹105 | 19x | ₹1,995 |
| Base | ₹105 | 21x | ₹2,205 |
| Bull | ₹105 | 24x | ₹2,520 |
🔎 Current Price: ₹1,961
🔔 Upside Potential: ~12% to ~28% from current levels depending on rerating
🧠 7. EduInvesting Take
🗣️ “Too big to fail” is now literally true. HDFC Bank is:
- ✅ Still growing profits and EPS
- ✅ Safest large-cap bank with scale, brand, and consistency
- ❌ Slipping on margins, ROE, and operating efficiency
- ❌ Post-merger complexity makes analysis ugly
Would we bet against it? Nope. But would we expect 25% annual compounding again? Also nope.
HDFC Bank is now the Reliance of Banking — dominant, diversified, dividend-paying, but no longer the underdog.
✍️ Written by Prashant | 📅 June 24, 2025
Tags: HDFC Bank, banking stocks, private banks, HDFC merger, HDB IPO, EPS growth, fair value, PSU vs private, Indian banks, EduInvesting Recap
