One business group, four different stocks and also four different growth outlooks. But one common view from Motilal Oswal is positive on the long-term outlook.The HDFC Group is in focus after a series of business updates, first-quarter (Q1FY27) earnings and management commentary.
Following these developments, Motilal Oswal has reiterated its positive stance on several HDFC Group companies, although the expected upside varies across each stock.
Therefore, which HDFC Group stock offers the highest return potential? And what is driving the brokerage’s optimism?
Here’s a detailed analysis of Motilal Oswal’s investment rationale –
HDFC Bank: Motilal Oswal’s top pick
Among the HDFC Group companies covered, HDFC Bank carries the highest upside potential.
Motilal Oswal has maintained its ‘Buy’ rating with a target price of Rs 1,100, implying an upside of around 35% from the current market price.
According to the brokerage report, HDFC Bank continues to focus on “sustainable, profitable growth” while investing in branch expansion and digital capabilities.
The brokerage expects loan growth to remain healthy over the next few years and believes the gradual decline in the credit-to-deposit ratio and lower dependence on borrowings should improve margins.
It added, “We estimate HDFC Bank to deliver a loan CAGR of 14.1% over FY26-28, alongside an earnings CAGR of 14.2%.”
Motilal Oswal also highlighted the bank’s strong asset quality, stable provisioning buffers and improving operating leverage, supported by higher employee productivity and the use of Artificial Intelligence (AI).
HDFC Life Insurance: Margins remain resilient
Motilal Oswal has also retained its ‘Buy’ rating on HDFC Life Insurance with a revised target price of Rs 690. This translates to an upside potential of 21% from the current market price.
Motilal Oswal noted that the insurer reported healthy growth in Annualised Premium Equivalent (APE), while Value of New Business (VNB) margins remained stable despite changes in product mix.
According to the report, “We maintain our APE estimates but increase our VNB margin estimates by 50bp for FY27.”
The brokerage expects growth to remain supported by improving protection business, a diversified product mix and continued momentum across agency and non-HDFC Bank distribution channels.
It also believes the temporary impact of losing the ITC account should normalise during the first half of FY27.
HDFC AMC: Riding on steady SIP inflows
Another HDFC Group company that continues to receive a positive view is HDFC Asset Management Company (HDFC AMC).
Motilal Oswal has reiterated its ‘Buy’ rating with a target price of Rs 3,300, implying an upside of around 21%.
As per the Motila Oswal report, the company’s operating performance remained healthy during the June quarter, supported by resilient equity inflows, steady Systematic Investment Plan (SIP) contributions and a favourable equity-oriented Asset Under Management (AUM) mix.
“We expect a ~15% CAGR in revenue, EBITDA, and PAT each, alongside ~15% AUM growth over FY26-28,” added Motilal Oswal report.
It also expects HDFC AMC to benefit from its expanding product portfolio, including Exchange Traded Funds (ETFs), Portfolio Management Services (PMS), Specialised Investment Funds (SIFs) and alternative investment products.
HDB Financial Services: Neutral despite improving fundamentals
HDB Financial Services, a Non-Banking Financial Company (NBFC) and a subsidiary of HDFC Bank, is also part of the broader HDFC Group.
Unlike the other HDFC Group companies, Motilal Oswal has maintained a ‘Neutral’ rating on HDB Financial Services.
The brokerage has set a target price of Rs 810, indicating an upside potential of around 8%.
Motilal Oswal in its report added that the improving margins, lower credit costs and better asset quality have supported earnings. It has also raised its earnings estimates for FY27 and FY28.
The report noted, “HDB Financial reported a steady quarter, with earnings slightly ahead of estimates.”
However, Motilal Oswal believes valuations already reflect much of the company’s medium-term growth potential. It added that stronger loan growth and sustained improvement in return ratios would be key factors to watch before turning more positive on the stock.
Which HDFC Group stock offers the highest upside?
Motilal Oswal’s top bets
| Company | Rating | Target Price | Implied Upside |
| HDFC Bank | Buy | Rs 1,100 | 35% |
| HDFC AMC | Buy | Rs 3,300 | 21% |
| HDFC Life Insurance | Buy | Rs 690 | 21% |
| HDB Financial Services | Neutral | Rs 810 | 8% |
Among the HDFC Group companies covered by Motilal Oswal, HDFC Bank stands out with the highest projected upside of around 35%.
It is followed by HDFC AMC and HDFC Life Insurance with nearly 21% upside. HDB Financial Services, meanwhile, remains the brokerage’s most cautious call, with a Neutral rating despite improving business fundamentals.
Disclaimer: Investment involves significant market risks; the specific target prices, return potentials, and ratings cited are third-party brokerage projections from Motilal Oswal and do not guarantee future performance. This content is purely informational and does not constitute an offer, solicitation, or direct investment recommendation to buy, sell, or hold any financial instruments. Readers are strongly advised to conduct independent research and consult a SEBI-registered investment advisor before making any financial decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.
