India’s largest private sector lender, HDFC Bank share price is up 1.5% today after its Q2FY26 results. The bank posted a standalone net profit of Rs 18,641.28 crore. This is up 11% YoY from Rs 16,820.97 crore in the same quarter last year.

Moreover, its net interest income (NII) rose 4.8% YoY to Rs 31,550 crore, while the core net interest margin (NIM) stood at 3.27%, slightly below the 3.35% recorded in Q1 FY26.

Let’s take a look at the brokerage firm Nuvama call on this stock –

Nuvama on HDFC Bank: Sees strong upside potential

The brokerage house, Nuvama has maintained a ‘Buy’ rating on HDFC Bank with a target price of Rs 1,170. This implies an upside of 16–17% from the current market price.

The report noted, “HDFC Bank has already scaled up growth to system level and we expect NIM to improve Q3FY26 onwards. Given superior asset quality and improving core earnings, we reckon the stock shall outperform.”

Nuvama on HDFC Bank: Loan growth picks up, deposits steady

HDFC Bank’s loan portfolio grew 4.5% QoQ and 10% YoY. Retail loans rose 2% QoQ, while wholesale loans increased 5% on a low base. Within retail segments, big-ticket loans grew 4% QoQ, gold loans 6%, two-wheeler loans 4%, and auto, personal, and home loans 2%.

Credit cards rose 1% QoQ as the bank remained selective on festive offers. Deposits grew 12% YoY and 1% QoQ, with average deposit growth at 15% YoY.

As per the brokerage report, “Reported NIM fell 8bp QoQ with the decline in yield on IEA of 21bps higher than the decline of 15bp in CoF.”

Nuvama on HDFC Bank: Fee income and earnings trends

Fee income surged 17% QoQ and 9% YoY, partially driven by faster loan growth. Trading gains declined sharply due to the absence of lumpy capital gains booked in Q1 from the HDBFS stake sale.

Furthermore, the report noted, operating expenses increased 3% QoQ. Core PPOP grew 4% YoY and remained flat QoQ. PAT rose 11% YoY and 3% QoQ.

Nuvama on HDFC Bank: Asset quality remains strong

HDFC Bank continued to maintain strong asset quality, with non-agri slippage down 7% QoQ and total slippage, including agri, falling 18% QoQ to 1.2% from 1.4% in Q1 FY26.

The brokerage report stated, “Not only did slippage decline, even upgrades were higher. There was a lumpy upgrade of an e-HDFC loan of 10bp of loans leading to a sharp reduction in NPL. GNPL dipped 7% QoQ to 1.24%.”

Core credit cost fell sharply to 28bp from 56bp QoQ, supported by lower slippage and upgrades. Total provisioning, including specific, general, and contingency, was 52bp, down from 2.2% in Q1, noted the report.

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