Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>In Q4FY25, deposits grew strong at 15.8% YoY. QoQ, average deposits grew by 3.1%. Time deposits led the growth while growth in CASA deposits was relatively muted.</li>
<li>In line with its stated strategy, HDFCB's loan book has been growing slower than that of deposits to bring down the credit-deposit ratio. Average AUM grew 7.3% YoY in Q4FY25.</li>
<li>Credit-Deposit ratio is now at 96% vs 110% at merger. Going forward, the adjustment in credit-deposit ratio won't be as steep, thus FY26 is expected to be a normalization year.</li>
</ul>


In Q4FY25, deposits grew strong at 15.8% YoY. QoQ, average deposits grew by 3.1%. Time deposits led the growth while growth in CASA deposits was relatively muted.
In line with its stated strategy, HDFCB's loan book has been growing slower than that of deposits to bring down the credit-deposit ratio. Average AUM grew 7.3% YoY in Q4FY25.
Credit-Deposit ratio is now at 96% vs 110% at merger. Going forward, the adjustment in credit-deposit ratio won't be as steep, thus FY26 is expected to be a normalization year.


HDFC Bank ("HDFCB"): Steady Performance in Line with Expectation

Pan-Asia Tactical Market Calls (Quant-Driven), MRM Research

Nico Rosti

Pan-Asia Tactical Market Calls (Quant-Driven)

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> is navigating a mix of positive growth indicators and emerging regulatory challenges but average 12-month target is ₹2,194, with estimates ranging from ₹1,627 to ₹2,793.</li>
<li>Consensus rating: predominantly "Buy" from major brokerages, including ICICI Securities and Motilal Oswal, citing strong loan growth and stable asset quality.</li>
<li>The stock’s strong fundamentals and growth outlook remain intact, but momentum has stalled in recent weeks following <a href="https://www.smartkarma.com/insights/time-to-buy-hdfc-bank-hdfcb-in" target="_blank" rel="noopener">the sharp rally we correctly anticipated from January 14, 2025</a>.</li>
</ul>



HDFC Bank (HDFCB IN) is navigating a mix of positive growth indicators and emerging regulatory challenges but average 12-month target is ₹2,194, with estimates ranging from ₹1,627 to ₹2,793.
Consensus rating: predominantly "Buy" from major brokerages, including ICICI Securities and Motilal Oswal, citing strong loan growth and stable asset quality.
The stock’s strong fundamentals and growth outlook remain intact, but momentum has stalled in recent weeks following the sharp rally we correctly anticipated from January 14, 2025.


HDFC Bank Tactical View: Inflection Point or Just a Pause?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> is one of those few stocks that were nearly unaffected by the recent market turmoil (-5.7% pullback, peak to bottom and now at new highs).</li>
<li>
<a href="https://www.smartkarma.com/insights/time-to-buy-hdfc-bank-hdfcb-in" target="_blank" rel="noopener">Our insight in January 14th 2025</a> signaled a strong buy opportunity, the stock rallied +13% from there.</li>
<li>Now the stock has reached its previous all time highs, and may become overbought. Long-term outlook remains positive, but a short-term pullback is possible in the next 2 weeks.</li>
</ul>



HDFC Bank (HDFCB IN) is one of those few stocks that were nearly unaffected by the recent market turmoil (-5.7% pullback, peak to bottom and now at new highs).

Our insight in January 14th 2025 signaled a strong buy opportunity, the stock rallied +13% from there.
Now the stock has reached its previous all time highs, and may become overbought. Long-term outlook remains positive, but a short-term pullback is possible in the next 2 weeks.


Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought

<ul>
<li>Deposit growth has been decent and exceeded loan growth, allowing HDFCB to bring down its credit-deposit ratio. Average deposits grew 15%+ YoY, while loans grew at 7%+ YoY in Q3FY25.</li>
<li>Despite tough macro environment, HDFCB was able to gain market share in deposits. Despite headwinds from tight liquidity leading to competitive pricing, HDFCB was able to maintain its NIM.</li>
<li>HDFCB is benefitting from its productivity and technology-led enhancements with costs growing at just 7% YoY. Despite weak macro-economic environment, HDFCB's asset quality has remained pristine, barring seasonality in Agri-loans.</li>
</ul>


Deposit growth has been decent and exceeded loan growth, allowing HDFCB to bring down its credit-deposit ratio. Average deposits grew 15%+ YoY, while loans grew at 7%+ YoY in Q3FY25.
Despite tough macro environment, HDFCB was able to gain market share in deposits. Despite headwinds from tight liquidity leading to competitive pricing, HDFCB was able to maintain its NIM.
HDFCB is benefitting from its productivity and technology-led enhancements with costs growing at just 7% YoY. Despite weak macro-economic environment, HDFCB's asset quality has remained pristine, barring seasonality in Agri-loans.


HDFC Bank (HDFCB): Robust Deposit Growth Despite Tough Environment

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>In May, SEBI recommended changes to the minimum number of constituents for non-benchmark indices and the capping for those indices. Then came the market consultation in August.</li>
<li>SEBI has now confirmed the changes along with the timeline for capping changes to the largest stocks in the index.</li>
<li>The changes could commence in December and continue till March. The adds will take place in December and weight changes for the largest stocks will take place in 4 tranches.</li>
</ul>


In May, SEBI recommended changes to the minimum number of constituents for non-benchmark indices and the capping for those indices. Then came the market consultation in August.
SEBI has now confirmed the changes along with the timeline for capping changes to the largest stocks in the index.
The changes could commence in December and continue till March. The adds will take place in December and weight changes for the largest stocks will take place in 4 tranches.


NIFTY Bank Index: Methodology Changes to Result in Big Flows

India

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

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HDFC Bank (HDFCB IN)

HDFC Bank ("HDFCB"): Steady Performance in Line with Expectation

FY26 is expected to be the first normalization year for HDFCB post the merger. HDFC Bank is all set to bring its loan growth back in line with its...

Ankit Agrawal, CFA

HDFC Bank Tactical View: Inflection Point or Just a Pause?

HDFC Bank momentum has stalled in recent weeks but the stock maintains strong growth outlook with average 12-month target of ₹2,194 and "Buy"...

Nico Rosti

Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought

HDFC Bank stock has remained resilient amid market turmoil, reaching previous all time highs on April 15, but the the odds for a short-term...

Nico Rosti

HDFC Bank (HDFCB): Robust Deposit Growth Despite Tough Environment

Despite high competitive intensity, HDFCB has seen strong deposits growth. Its post-merger liquidity and credit-deposit metrics have come into...

Ankit Agrawal, CFA

NIFTY Bank Index: Methodology Changes to Result in Big Flows

The methodology and capping changes for the Nifty Bank Index will be implemented in 4 tranches, likely ending in March. The flows are big and the...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HDFC Bank ("HDFCB"): Steady Performance in Line with Expectation

FY26 is expected to be the first normalization year for HDFCB post the merger. HDFC Bank is all set to bring its loan growth back in line with its...

Ankit Agrawal, CFA

HDFC Bank Tactical View: Inflection Point or Just a Pause?

​HDFC Bank momentum has stalled in recent weeks but the stock maintains strong growth outlook with average 12-month target of ₹2,194 and "Buy"...

Nico Rosti

Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought

​HDFC Bank stock has remained resilient amid market turmoil, reaching previous all time highs on April 15, but the the odds for a short-term...

Nico Rosti

HDFC Bank (HDFCB): Robust Deposit Growth Despite Tough Environment

Despite high competitive intensity, HDFCB has seen strong deposits growth. Its post-merger liquidity and credit-deposit metrics have come into...

Ankit Agrawal, CFA

NIFTY Bank Index: Methodology Changes to Result in Big Flows

The methodology and capping changes for the Nifty Bank Index will be implemented in 4 tranches, likely ending in March. The flows are big and the...

Brian Freitas

HDFC Bank momentum has stalled in recent weeks but the stock maintains strong growth outlook with average 12-month target of ₹2,194 and "Buy"...

HDFC Bank stock has remained resilient amid market turmoil, reaching previous all time highs on April 15, but the the odds for a short-term...