HDFC Bank Shares Show Little Movement After Quarterly Earnings Announcement
Shares of HDFC Bank, India's largest private sector bank, traded with minimal change on Monday. This followed the release of the bank's financial results for the third quarter of the 2025-26 fiscal year. The stock price experienced a slight dip early in the trading session.
Key Financial Highlights from Q3 FY26
The bank reported a net profit of ₹18,653.75 crore for the quarter. This figure represents an 11.4% increase compared to the same period last year. Net Interest Income, a crucial measure of core banking profitability, also saw growth. It rose by 6.4% year-on-year to reach ₹32,615 crore.
The core net interest margin stood at 3.35% based on total assets. When calculated on interest-earning assets, the margin was slightly higher at 3.51%. Loan growth showed improvement, registering a 12% increase from the previous year.
Concerns Emerge on Asset Quality and Deposits
However, the bank's asset quality displayed some sequential weakening. While the gross and net Non-Performing Asset ratios remained flat at 1.24% and 0.42% respectively, the absolute numbers told a different story.
Gross NPAs increased by 2.59% to ₹35,178.98 crore. Net NPAs saw a larger jump of 4.66%, reaching ₹11,981.75 crore. Deposit growth remained subdued at 11.6% year-on-year. This lagged behind loan growth, pushing the Credit-to-Deposit ratio higher to 98.7%.
Analyst Reactions: A Mixed Bag of Opinions
Brokerage firms have offered varied perspectives on the bank's performance and future outlook following the results.
Nuvama Institutional Equities maintained a 'Buy' rating on the stock. The firm cited a likely improvement in deposit growth, better net interest margins, and superior asset quality as key reasons. It set a target price of ₹1,170 per share.
JM Financial expressed caution. It downgraded its rating on HDFC Bank shares to 'Add' from 'Buy'. The brokerage highlighted the stretched CD ratio and a low Liquidity Coverage Ratio as factors limiting growth potential. It revised its target price down to ₹1,050.
Motilal Oswal Financial Services reiterated its 'Buy' call. It expects deposits to grow faster than advances in the coming fiscal year. The firm projects a return on assets of 1.9% and a return on equity of 14.5% for FY27. Its target price stands at ₹1,175 per share.
Recent Stock Performance and Trading Details
HDFC Bank's share price has faced pressure in the short term. It declined by 6% over the past month and more than 7% in the last three months. However, the stock has delivered positive returns over longer horizons, gaining 13% in one year and rallying 25% over five years.
During Monday's trading session, the stock was observed trading 0.13% lower at ₹929.90 on the Bombay Stock Exchange around mid-morning.
Please note: The views and recommendations mentioned are those of individual analysts or brokerage firms. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
