The country’s largest private lender, HDFC Bank, reported a strong set of quarterly earnings. The bank’s net profit was aided by a beat on core net interest margin and lower slippages sequentially. As a result, brokerages have upgraded their ratings on the stock and revised the target price upwards. This is one of the first
BNP Paribas on HDFC Bank: Narrative changed from deposit to margins
The international brokerage house BNP Paribas said that HDFC Bank showed markedly greater receptiveness to the idea than during earlier visits. Now, the narrative has shifted from the availability of deposits or low credit growth to the potential trajectory of margins/RoA (return on assets). “Reversion to 16%+ RoE (return on equity) has been our core investment thesis, and incremental discussions were around timelines and potential glide path for the same,” said the brokerage house. The brokerage sees an upside of 47% with a target price of Rs 2,660. The focus areas were acceleration in system CASA momentum, potential HDFC Bank share and finally, reactions of margins to the same.
Nuvama on HDFC Bank: Raises target price by 12.5%
The brokerage firm Nuvama Institutional Equities raised the target price by 12.5% to Rs 2195 from Rs 1,950. It retained its ‘Buy’ call on the stock. It believes that the bank posted strong asset quality along with a gain in deposit market share, improving loan-to-deposit ratio, and an uptick in core net interest margin led to the upgrade in target price. However, Nuvama slashed NIM estimates, along with revising opex and credit cost estimates, leading to an insignificant EPS (earnings per share) revision. Its ex-agri slippage decreased 5% quarter-on-quarter, while including agri slippage fell 15% QoQ. Total slippage ratio was 1.2% versus 1.4%, which was the lowest among peers.
CLSA on HDFC Bank: Retains Outperform
The brokerage firm CLSA said that the private lender reported decent quarterly earnings. It retained its ‘Outperform’ rating on the stock with a target price of Rs 2,200. As the previous 4 quarters were weak, the bank has finally picked up loan growth this reporting quarter. The management has again said to grow in line with markets in FY26. However, it cut the net profit estimates by 2-3%.
Jefferies on HDFC Bank: Net profit higher than estimates
The brokerage house kept the Buy call unchanged with a 12-month price target of Rs 2,340. The bank’s net profit came higher than Jefferies’ estimates, helped by a pick-up in loan growth, it added, along with improved margins. “Better cross-sells &stable credit costs will aid core profits, but rate cuts will have an interim drag on NIMs,” said the brokerage firm.
UBS on HDFC Bank: Marginally raises EPS estimates
Another brokerage firm, UBS, in a research note, said that the bank’s NIM expansion was positive. Its deposit traction was healthy in Q4FY25, plus the modest loan growth led to LDR decline to 96.5%. However, UBS is more confident in the growth outlook given improved system liquidity. It marginally raised the earnings per share estimates for FY26 and FY27.
HDFC Bank stock performance
The stock price of HDFC Bank has risen almost 8% in the last five trading sessions. The stock has moved upward 7.7% in the past one month and more than 10% in the last six months. The stock has jumped 26% in the last one year. Here is a list of banking stocks you can check out.