HDFC Bank Stock Analysis — CMA Sandip Framework Scorecard

Section 1Snapshot

SectorPrivate Sector Banking

CMP~₹935

RevenueFY26 Net Revenue ₹1,91,220 Cr (+13.6% YoY)

ConvictionHigh

Last Updated22-Sep-26

Section 2Scorecard

Category	Parameter	Wt.	Score	Notes
Quality	Business Quality	10.00%	8.5	📌 Arihant Research Q4FY26 Note, 2026 India's largest private bank by assets; total deposits ₹31,053 Bn (+14.4% YoY), gross advances ₹29,600 Bn (+12% YoY) — genuine scale advantage.
Quality	Management Quality	10.00%	7.5	📌 Arihant Research, 2026 Post-merger (with erstwhile HDFC Ltd) integration continues; loan growth accelerated meaningfully to 12.1% FY26 from 5.4% FY25, showing execution is on track.
Quality	Growth Visibility	10.00%	7	📌 JM Financial, Oct 2025 NIM at 3.29% appears to have bottomed and is guided to recover to 3.32%/3.66%/3.90% over FY27-29E as deposit repricing plays out.
Quality	Moat	10.00%	8	📌 Arihant Research, 2026 CASA ratio of 34.1% and India's largest private banking distribution network are durable structural advantages.
Quality	Capital Allocation	6.67%	7.5	📌 Arihant Research, 2026 Dividend of ₹15.50/share for FY26; CAR at 19.7% (Basel III) with CET1 at 17.3% — strong capital buffer for continued growth.
Quality	Balance Sheet	6.67%	8.5	📌 Arihant Research, 2026 GNPA improved to 1.15% (from 1.33% YoY), NNPA to 0.38% — asset quality genuinely improving, not just stable.
Quality	Risk Profile	6.66%	7	📌 JM Financial, Oct 2025 Post-merger balance sheet remains larger and more complex; CD ratio moderation from elevated post-merger levels is a metric to watch.
Price	Valuation	13.33%	7	📌 Elara Capital; Business Standard, 2026 PE in the ~18-20x FY26E range across broker estimates — reasonable, not cheap, for India's largest private bank with a clear NIM recovery path.
Price	FCF Yield	13.33%	6.5	📌 Broker estimates, 2026 Bank-specific cash generation is best read via ROA (~1.7-1.9%) rather than classic FCF yield; profile is healthy and stable.
Price	Reverse DCF	13.34%	7	📌 ICICI Direct Q4FY26 Note Target price of ₹1,050 (ICICI Direct) implies the market is pricing steady RoA-led earnings growth rather than an aggressive re-rating — a reasonable ask.
Quality 60.00% / Price 40.00%			7.37

Section 3Investment Thesis

Rule: if you can't explain it in 5 bullets, you probably don't understand it clearly.

1

📌 Arihant Research Q4FY26 Note, 2026

FY26 PAT rose 10.9% YoY to ₹74,670 Cr on 13.6% net revenue growth, with GNPA improving to 1.15% and NNPA to 0.38% — profitability and asset quality improving together.

2

📌 Arihant Research Q4FY26 Note, 2026

Loan growth accelerated meaningfully to 12.1% in FY26 from just 5.4% in FY25, broadening across retail, SME, and corporate — a clear signal the post-merger growth engine is re-firing.

3

📌 Arihant Research Q4FY26 Note, 2026

NIM at 3.29% appears to have bottomed and is guided to recover progressively to 3.90% by FY29E as deposit repricing and rate easing play through.

Section 4What Can Go Wrong?

This section is more important than the thesis.

1

📌 Arihant Research, 2026

NIM compression through the post-merger period has weighed on return ratios; the recovery trajectory (3.32%→3.90% through FY29E) is a multi-year bet, not an immediate fix.

2

📌 Arihant Research, 2026

CD (credit-deposit) ratio remains elevated post-merger; management needs to sustain deposit growth to keep funding calibrated loan growth.

3

📌 JM Financial, Oct 2025

Integration of the erstwhile HDFC Ltd mortgage book into the bank's overall risk framework is a multi-year process still playing out.

Section 5Buy Triggers

Trigger	Action
NIM shows 2 consecutive quarters of sequential improvement, confirming the bottoming thesis	Add
Valuation corrects toward ~15-16x PE without a change in the improving asset-quality trend	Add

Section 6Sell Triggers

1NIM fails to recover and stays below 3.3% for 3+ consecutive quarters

2GNPA/NNPA trend reverses and deteriorates for 2+ consecutive quarters

3CD ratio rises further without matching deposit growth, straining liquidity

Section 7Valuation · 2026

Metric	Current	Historical	Source
PE (FY26E)	~18-20x	—	Elara Capital; JM Financial, 2026
ROA	~1.8-1.9%	Target 1.9%+ by FY28E	Various broker estimates, 2026
GNPA	1.15%	1.33% (Q4 FY25)	Arihant Research, 2026
Promoter Holdings	0% (no promoter)	FII+DII ~85%	Business Standard, 2025

Section 8Capex Commitments

a)

📌 ICICI Direct Q4FY26 Note

Continued technology and distribution investment to drive operating leverage and cost-to-income improvement over the medium term.

b)

📌 JM Financial, Oct 2025

Ongoing integration investment tied to the HDFC Ltd merger, particularly around mortgage-book systems and cross-sell infrastructure.

Section 9Competitive Landscape

Competitor	Segment	Threat
ICICI Bank	Private Sector Banking	High
Kotak Mahindra Bank / Axis Bank	Private Sector Banking	Medium
SBI	Banking (PSU)	Medium