HDFC Bank shares fall over 1% after Q4. Jefferies, Bernstein, 3 other brokerage weigh in

Shares of HDFC Bank, India’s leading private lender, fell as much as 1.3% to their day’s low of Rs 790 on the BSE on Monday after it reported a net profit of Rs 19,221 crore for the March quarter, registering a 9% increase from Rs 17,616 crore in the same period last year.

The bank’s interest income for the quarter stood at Rs 76,610 crore, slightly lower by 1.1% compared to Rs 77,460 crore a year ago. For the full year, return on assets stood at 1.94%, higher than 1.91% reported in the previous financial year.

Alongside the bank’s March quarter earnings, the board also recommended a final dividend of Rs 13 per equity share of face value Re 1 for FY26, subject to shareholder approval. This takes the total dividend for the year to Rs 15.50 per share. The record date for determining eligible shareholders has been fixed as Friday, June 19, 2026.

Should you buy HDFC Bank shares?

Jefferies has retained its buy rating on HDFC Bank with a target price of Rs 1,050, a 31% upside, while continuing to list it among its top picks. Revenue growth, including net interest income and fees, came in slightly below expectations, but this was offset by operating synergies, lower credit costs and higher treasury gains. Deposit growth improved to 14%, which supported loan growth of 12% and led to an around 400 basis points sequential decline in the loan-deposit ratio.

The brokerage believes that sustained momentum in deposit growth and net interest margins will be key drivers going ahead. It has made minor adjustments to its estimates and expects the bank to deliver a 15% CAGR in profit before tax, excluding treasury income.

Bernstein has maintained an Outperform rating on HDFC Bank with a target price of Rs 1,150, citing a steady quarterly performance despite recent volatility. The brokerage noted that loan growth was slightly subdued, while deposit growth remained healthy. Net interest margins stayed resilient, expanding 2 basis points sequentially to 3.53%. Credit costs declined to around 35 basis points, providing support to overall earnings.

Return on assets remained stable at around 1.9%, supported by earnings growth of 9% year-on-year. The brokerage added that balance sheet adjustments are progressing, with improvement in the loan-deposit ratio. Overall, it sees stable operating performance with gradually strengthening fundamentals.

Motilal Oswal has reiterated its buy rating on HDFC Bank with a target price of Rs 1,100, noting that the lender delivered an in-line performance for the quarter. The results were supported by steady business growth, expansion in net interest margins and strong asset quality. The bank continues to maintain strong buffers and Motilal Oswal expects net interest margins to improve gradually, aided by the phased reduction of high-cost borrowings and better operating leverage, which should support return ratios over the coming years.

Elara Capital has maintained its buy rating on HDFC Bank, while trimming the target price to Rs 976 from Rs 1,147. The brokerage noted that Q4 profit after tax rose 9% year-on-year, supported by lower credit costs and higher treasury gains. Elara Capital highlighted that balancing growth, margins, liquidity coverage ratio and the credit-deposit ratio remains a key challenge for the bank. It added that valuations appear attractive after the recent correction with limited downside, although a meaningful re-rating may take time due to the absence of near-term triggers.

JM Financial has maintained its add rating on HDFC Bank and raised the target price to Rs 890. The brokerage noted that the bank’s relatively high credit-deposit ratio of 94.6% and a liquidity coverage ratio of 114% could restrict its ability to accelerate growth in the near term, leading it to factor in a loan CAGR of around 14% over FY26–28.

Despite this, JM Financial remains constructive on the bank’s outlook, citing its strong asset quality and expected improvement in margins by FY28, supported by a gradual reduction in high-cost funding. It expects HDFC Bank to deliver an average return on assets of 1.8% and return on equity of 14% over FY27–28, driven by an earnings CAGR of about 13% during FY26–28.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)