HDB Financial Services: Momentum picking up... expect healthy 17% loan growth from FY28F but 14% in FY27F. We lift TP to INR790; maintain Neutral

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HDB Financial Services: Momentum picking up... expect healthy 17% loan growth from FY28F but 14% in FY27F. We lift TP to INR790; maintain Neutral

Nomura | HDB Financial Services 15 July 2026

Company profile

Incorporated in 2007, HDB Financial Services Ltd (HDBFSL) is one of India’s largest retail-focused non-banking financial companies (NBFCs),

engaged in lending and select BPO services. The company is promoted by HDFC Bank, which holds 74.15% of its equity share capital, positioning

HDBFSL as a strategic subsidiary within the HDFC Bank ecosystem. HDBFSL operates across three core lending verticals — Enterprise Lending,

Asset Finance, and Consumer Finance — catering to a diversified borrower base spanning self-employed individuals, SMEs, and retail customers.

As of March 31, 2025, Asset Finance and Enterprise Lending each contribute 38% of AUM, while Consumer Finance accounts for 24%, reflecting a

balanced and granular portfolio mix. The company has also expanded into newer segments such as consumer durable financing, gold loans, and

digital product loans, which together constitute ~8% of FY25 AUM, indicating calibrated diversification beyond its traditional base. HDBFSL has built

a wide distribution footprint with 1,749 branches across 1,157 cities in India, transitioning from a predominantly non-metro, self-employed borrower

focus to a broader presence including metro markets.

Valuation Methodology

We use a residual income methodology to arrive at our TP of INR790, implied PB as of Jun28 is 2.3x PB. We have used a discounted residual

income method over other valuations methods such as Gordon Growth Model. We prefer residual income as it juxtaposes profits with the cost of

capital required to deliver those profits. The benchmark index is Nifty 50