HDFC Bank is in the spotlight after delivering strong loan growth in Q2. Nomura has a Buy rating on the largest private sector bank, as they believe it is well poised for growth in FY26. The brokerage house has revised its target price to Rs 1,095 per share from Rs 2,190 after the 1:1 bonus issue. This implies nearly 13% upside for the HDFC Bank share price from current levels.
Nomura on HDFC Bank: Loan growth strong
Nomura listed the highlights of HDFC Bank’s Q2 updates and explained the investment rationale. According to them, HDFC Bank’s strong 3.1% QoQ growth in its gross AUM is a key positive. AUM has also risen nearly 9% on a year-on-year basis. Moreover, the bank’s net loan sell-down as well as the gross loan growth was robust at 4.4% QoQ and 9.9% YoY.
The deposit growth was soft during the quarter at 1.4% QoQ, though year-on-year the bank delivered double-digit growth at 12.1%, driven by 7.4% YoY growth in CASA deposits and 14.6% YoY growth in term deposits. The CASA ratio was stable at 33.9% QoQ. The loan-to-deposit ratio was up 285 bps QoQ at 99%.
HDFC Bank Q2 earnings preview
The Q2 update becomes a key monitorable given that the major bank is set to announce its earnings on October 18. The banking major is likely to post single-digit profit growth, but it’s expected to be a definite improvement on a sequential basis. The street will watch out for the bank’s NPA and margins. The net interest margins are expected to indicate a mixed trend. The higher base effect may skew some of the big bank margins in Q2.
Any commentary by the bank on dividend will also be keenly watched.
HDFC Bank Q1
The high point of HDFC Bank’s Q1 numbers was the contribution of the HDB Financial stake sale to its profit. However, despite the Rs 9,128 crore pre-tax gain, its Q1FY26 net profit fell to Rs 16,258 crore from Rs 16,475 crore in Q1FY25. The special Rs 5 dividend and the 1:1 bonus issue were the key focus areas of the Q1 results.
HDFC Bank share performance
The HDFC Bank shares are up over 1% in trade today. The stock has gained close to 2% in the last 1 month and clocked 9% plus gains in 2025 so far. The gains in the last 1 year exceed 17%.