HDFC Bank Ltd. has declared a final dividend of Rs 13 per share, bringing its total dividend for the financial year 2026 to Rs 15.50 per share. This includes an earlier special interim dividend of Rs 2.50 per equity share. Notably, this marks the lowest total dividend declared by the bank since FY22.
HDFC Bank's Dividend Trend
The record date for determining investor eligibility for the final dividend is set for Friday, June 19, pending shareholders' approval at the upcoming annual general meeting. In previous years, HDFC Bank announced dividends of Rs 22 per share for FY25, Rs 19.50 per share for FY24, and Rs 19 per share for FY23. Data compiled from AceEquity indicates a total dividend of Rs 15.50 per share for FY22. The bank's dividend yield has typically ranged between 1.05-1.35 percent over the last four financial years.
Leadership Transition Eyed by Analysts
While analysts generally hold a positive view on HDFC Bank's fundamentals following its Q4 results, the clarity surrounding the current Managing Director & CEO succession remains a significant point of observation. Sashidhar Jagdishan's current term is scheduled to conclude in October 2026.
Axis Securities noted that with limited opportunities for net interest margin (NIM) expansion, HDFC Bank's strategy focuses on enhancing return on assets (RoA) through operational efficiency and managing credit costs. They project a RoA/RoE of 1.8-1.9 percent/14-16 percent for the bank, setting a target price of Rs 1,020. ICICI Securities, while acknowledging the recent departure of the part-time Chairman, views it as an isolated incident without material business impact. They emphasize the importance of the incumbent MD & CEO's full-term renewal, suggesting a target of Rs 1,080.
HDFC Bank vs. ICICI Bank: A Valuation Comparison
Several brokerages have drawn comparisons between HDFC Bank and its peer, ICICI Bank. Anand Rathi continues to favor ICICI Bank due to its stronger position in balancing growth against margin trade-offs, supported by high balance sheet liquidity and lower cost of funds. However, they upgraded HDFC Bank to 'Buy' with a target price of Rs 967, citing an improved risk-reward profile after recent stock corrections.
JM Financial maintained an 'ADD' rating, revising its target price for HDFC Bank to Rs 890 from Rs 850. They value the core bank at 1.7 times its estimated FY28 book value, which represents a 25 percent discount to ICICI Bank. This discount is attributed to HDFC Bank's relatively lower growth and Return on Equity (RoE).
SBI Securities highlighted HDFC Bank's strong deposit accretion in the March quarter amidst intense competition, leading to a decline in the Credit-Deposit (CD) ratio. They noted stable margins and best-in-class asset quality, anticipating sustained credit growth into FY27, driven by retail and SME segments. This brokerage has an open call with a target of Rs 1,110.
Brokerage Price Targets for HDFC Bank
- PL Capital: Trimmed NIM and fee income estimates for FY27 and FY28, tweaking its target to Rs 1,100 from Rs 1,150.
- Equirus Securities: Broadly retained estimates, rolling over earnings to March 2027, suggesting a target of Rs 1,160.
- Antique Stock Broking: Retained 'Buy' rating, revised target to Rs 1,055 from Rs 1,100.
- Nuvama: Reiterated 'BUY' but cut FY27E EPS by 3 percent and reduced target and valuation multiple to Rs 1,050 from Rs 1,170, citing cautious sentiment despite the chairman's exit.
- MOFSL: Maintained earnings estimates, expecting HDFC Bank to deliver FY27E RoA/RoE of 1.84 percent/14.4 percent. Reiterate 'BUY' with a target of Rs 1,100.
- Systematix: Maintained 'Buy' rating with an unchanged target price of Rs 960.
- Nirmal Bang Institutional Equities: Positive for the long term due to asset quality, growth potential, margin improvement, and merger synergies, giving a target of Rs 1,069.