One of the country’s largest private sector bank, HDFC Bank share price is in focus today, January 19 after the company posted its Q3 results. In its Q3FY26 earnings, the private lender reported a steady growth in core income and margins.
HDFC Bank Q3 numbers recap
In its Q3FY26 earnings, the net interest income of the company surged 6.4% year-on-year (YoY) to Rs 32,620 crore. Furthermore, the net interest margin stood at 3.35% on core assets and 3.51% on interest-earning assets.
Similarly, the Profit after tax (PAT) of this private lender increased 11.5% on-year to Rs 18,650 crore.
Let’s take a look at what brokerage say about this stock and the rationale behind their views.
Nuvama on HDFC Bank: Predict 25% upside potential
The brokerage house Nuvama has maintained a ‘Buy’ rating on HDFC Bank. The brokerage has set a target price of Rs 1,170. This translates to an upside potential of 25% from current levels.
According to the brokerage report, the bank delivered a “beat on core PPOP (Pre-Provision Operating Profit)” for Q3FY26. This was supported by higher non-interest income and controlled operating expenses.
Nuvama on HDFC Bank: Margins, deposits and loan trends
The brokerage report further added, “NIM expanded 8bp QoQ” while net interest income grew both sequentially and year-on-year.
The deposit growth of the company was slower than expected, pushing the loan-to-deposit ratio higher to around 98.7%. However, management remains confident of bringing the ratio down to “approx. 95% in FY26”.
Nuvama on HDFC Bank: Costs, provisions and labour code impact
The brokerage firm in its report added that higher trading gains were partly offset by a “one-time wage provision for the new labour codes of Rs 800 crore.”
Core operating costs did not change much from the last quarter. The bank also provided Rs 500 crore for agriculture priority sector lending after the Reserve Bank of India’s annual inspection.
Nuvama on HDFC Bank: Asset quality and outlook
As per brokerage report, asset quality remains stable with “slippage remained low” and the gross non-performing loan ratio steady at 1.24%. Credit costs declined sequentially, while recoveries improved.
The Reserve Bank of India recently completed its annual inspection. After this, the bank set aside Rs 500 crore for agricultural priority loans. The brokerage said this is lower than what many other banks have set aside.
According to the brokerage report, improving margins, steady asset quality and gradual normalisation of the loan-to-deposit ratio will be key factors influencing HDFC Bank shares in the coming quarters.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.