Synopsis: HDFC Bank Limited gets positive views from Jefferies and JPMorgan, citing attractive valuations, strong asset quality, steady growth outlook, and improving margins, despite near-term deposit and earnings challenges.
This Private Sector Bank, engaged in providing banking and financial services, including retail banking, corporate banking, loans, payments, treasury operations, and digital financial solutions across India, is in focus after Jefferies and JPMorgan gave a Buy target of Rs. 1,240 and Rs. 1,010 per share, respectively, which has an upside potential of up to 69.45 percent.
With a market capitalization of Rs. 11,26,486.69 crore, the shares of HDFC Bank Limited were currently trading at Rs. 731.80 per equity share, down nearly 3.23 percent from its previous day’s close price of Rs. 756.25.
What is the News?
Jefferies, a prominent brokerage firm, has recommended a “Buy” call on HDFC Bank Limited with a target price of Rs. 1,240 per share, indicating an upside potential of 69.45 percent from its current price of Rs. 731.80 per share.
HDFC Bank remains a top pick for Jefferies, as its valuations have become attractive after the recent correction. The stock is now trading at around 1.6x FY27 estimated adjusted book value, which is at a discount and only a small premium compared to peers. Despite this, the bank continues to show strong asset quality, steady growth, and healthy return on equity.
Jefferies believes the bank can handle risks such as higher credit costs or slower revenue growth. It also expects that clarity on leadership decisions, including CEO tenure and chairman appointment, could improve investor confidence and support a potential rerating going forward.
Similarly, JPMorgan, a prominent brokerage firm, has upgraded to “Overweight” call from “Neutral” on HDFC Bank Limited with a target price revised to Rs. 1,010 per share from Rs. 1,090, indicating an upside potential of 38.02 percent from its current price of Rs. 731.80 per share.
JPMorgan has upgraded HDFC Bank to “Overweight” from Neutral, highlighting that the recent valuation reset has created an attractive entry point. The brokerage believes the bank’s core franchise remains strong, supported by its solid market position and consistent performance over time.
JPMorgan expects a gradual recovery in overall credit growth, which should support the bank’s business momentum. It also sees improvement in return on assets (RoA) as the bank replaces higher-cost borrowings with lower-cost deposits, helping improve margins and profitability.
The bank’s strong asset quality track record and stable liability franchise position it well in a challenging macro environment. However, tight deposit conditions may impact near-term sentiment and earnings. Still, JPMorgan believes most risks are already priced in after the recent valuation correction.
Key Financial Parameters
HDFC Bank reported steady performance in Q3 FY26, supported by healthy growth in deposits and advances. Average deposits stood at Rs. 27,524 billion, growing 12.2 percent year-on-year and 1.5 percent sequentially, while advances under management reached Rs. 28,641 billion, up 9 percent YoY and 2.5 percent QoQ. This reflects stable business growth and continued demand.
The bank maintained a net interest margin (NIM) of 3.35 percent and a core cost-to-income ratio of 39.2 percent, indicating efficient operations. Asset quality remained strong, with gross NPA at 1.24 percent (0.97 percent excluding agriculture). Return on assets (RoA) stood at 1.9 percent, highlighting consistent profitability and financial stability.
Branch Network and Customer Base
HDFC Bank has a strong branch network spread across metro (29 percent), urban (21 percent), semi-urban (33 percent), and rural (17 percent) areas, with a total network of around 9,616 branches. This wide mix helps the bank reach customers across all regions and supports steady expansion.
The bank’s customer base has grown from 93 million in Dec’23 to 100 million in Dec’25, an increase of about 7 million customers or nearly 7.5 percent. This steady growth reflects rising demand, strong customer trust, and the bank’s ability to expand across different segments.
Company Overview
HDFC Bank Limited was founded in 1994 and is a leading private sector bank headquartered in Mumbai, India. It is known for its large retail banking franchise, strong digital infrastructure, and consistent profitability, making it one of India’s most valuable financial institutions by market capitalization.
Recent Quarter Results
Coming into financial highlights, HDFC Bank Limited’s Net Interest Income has increased from Rs. 38,125 crore in Q3 FY25 to Rs. 41,245 crore in Q3 FY26, which has grown by 8.18 percent. The net profit has also grown by 12.82 percent from Rs. 18,340 crore in Q3 FY25 to Rs. 20,691 crore in Q3 FY26. HDFC Bank Limited’s Net Interest Income and net profit have grown at a CAGR of 25.38 percent and 24.4 percent, respectively, over the last three years.
In terms of return ratios, the company’s ROCE and ROE stand at 7.51 percent and 14.4 percent, respectively. HDFC Bank Limited has an earnings per share (EPS) of Rs. 48.6, and its debt-to-equity ratio is 6.20x.
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