HDFC Bank, the largest private banking institution in India, has announced impressive quarterly earnings that have encouraged analysts to reassess their views on the stock. The bank’s significant net profit increase was supported by robust core net interest margins and a notable reduction in slippages. Consequently, several brokerage firms have upgraded their ratings and adjusted target prices for HDFC Bank shares.

Nuvama’s Positive Outlook for HDFC Bank

Nuvama Institutional Equities has raised its target price for HDFC Bank by 12.5%, shifting it from ₹1,950 to ₹2,195. The firm has maintained its ‘Buy’ recommendation, citing the bank’s strong asset quality, a rise in deposit market share, and a better loan-to-deposit ratio as key factors. Although Nuvama has revised its estimates for net interest margins (NIM) downward, it still anticipates a solid performance, with a 5% reduction in ex-agricultural slippage quarter-on-quarter. Including agricultural slippage, the decrease is a noteworthy 15%, resulting in a total slippage ratio of 1.2%, the lowest among its competitors.

CLSA’s Assessment of HDFC Bank’s Performance

CLSA has also weighed in on HDFC Bank, reaffirming its ‘Outperform’ rating with a target price set at ₹2,200. They observed that after several quarters of lackluster performance, the bank has finally experienced a resurgence in loan growth. Management has indicated plans to align growth with market trends for FY26. However, CLSA has slightly adjusted its net profit forecasts down by 2-3%.

Jefferies Highlights Strong Earnings

Jefferies continues to endorse HDFC Bank with a ‘Buy’ rating and a 12-month price target of ₹2,340. The firm reported that the bank’s net profit surpassed its predictions, bolstered by a revival in loan growth and enhanced margins. Jefferies commented, “Improved cross-selling and stable credit costs will support core profits, although potential rate reductions might temporarily impact NIMs.”

UBS’s Optimistic View on Future Growth

UBS’s recent analysis indicates a positive shift in HDFC Bank’s NIM expansion, highlighting healthy deposit growth in Q4FY25. The modest loan growth has resulted in a decrease in the loan-to-deposit ratio to 96.5%. UBS expressed increased confidence in the bank’s growth trajectory, thanks to better liquidity in the financial system, leading to a slight upward adjustment in its earnings per share estimates for FY26 and FY27.

HDFC Bank’s Stock Performance

In terms of stock performance, HDFC Bank has seen a remarkable increase of nearly 8% over the last five trading sessions. It has experienced a 7.7% rise in the past month and over 10% in the last six months. Impressively, the stock has surged by 26% over the past year.

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In summary, HDFC Bank’s strong quarterly performance has captured the attention of analysts, leading to various upgrades in stock ratings and target prices, reflecting a positive outlook for the bank’s future growth.