HDFC Bank, the largest private sector lender in India and the top brokerage pick after its analyst day that followed Q4 results for FY23.Brokerages expect a potential upside of up to 35%.
HDFC Bank management sounded confident on key parameters following the merger with NBFC-giant HDFC. The management of the lender expects that the merger between HDFC Bank & HDFC will be completed in the next 4 to 5 weeks. They have also provided their FY24 guidance.
HDFC Bank shares closed at Rs 1,615.50 each on Friday, a slight increase from the previous session. The stock price on BSE fell by almost 2% in the week ending on May 26th.
HDFC Bank plans to add 1,500 branches per year on average over the next four years. It expects these new branches to produce material results within eight to ten years. The management also expects that the cost-to-income ratio will trend downward over the next three to four years.
Santanu Chakrabarti, the analyst at BNP Paribas, said in the note, "In what is sure to be music to even the most ardent fans of the bank's ears, HDFCB intends to revamp its mobile app and net-banking by the end of FY24 and both are just about to enter beta testing."
Chakrabarti said, "Recognizing UPI transaction volume as the main cause of recent outages, HDFCB designed a buffer system layer that feeds into core banking at a lag time of a few milliseconds, rather than live. The entire data architecture seems to be based on the slogan 'hollow core'
After the merger, the focus would shift to customer-centricity from product-based. The merger will provide access to 25mn HDFC Group customers who do not bank at HDFC Bank, while 60-70% of HDFC Ltd. clients do not have any liability relationship with the bank.