India's largest private lender HDFC Bank's shares were in the green on Monday, July 21, after reporting a 12 percent jump in net profit for the quarter ended June 30, 2025. Brokerages rushed to hike their target prices on the bank, expecting stronger growth in the second half of the current fiscal year.
HDFC Bank posted a standalone net profit of Rs 18,155 crore for the quarter ended June 2025, marking a 12 percent rise from Rs 16,175 crore in the same period last year. Interest income for the quarter came in at Rs 77,470 crore, reflecting a 6 percent increase over the previous year.
Net interest income (NII) for the quarter stood at Rs 31,438 crore, up 5.4 percent year-on-year. The bank’s core net interest margin (NIM) slipped to 3.35 percent from 3.46 percent in the March quarter, as deposit costs rose faster than yields on assets.
Total operating expenses grew 4.9 percent year-on-year to Rs 17,434 crore, including Rs 6,158 crore in employee costs and Rs 11,276 crore under other overheads.
At 9.16 a.m., shares of the bank were quoting Rs 1,993.2, higher by 1.8 percent on the NSE.
Should you buy, sell, or hold shares of HDFC Bank?
Given a fortified buffer of provisions, which is a traditional strength of HDFC Bank, likely pickup in growth and stability in NIM in H2, Nuvama Institutional Equities reiterated its 'buy' rating, with an increased target price of Rs 2,270, from Rs 2,195 earlier.
Following the list of HDFC Bank's subsidiary HDB Financial Services, the bank registered one-off gains which it prudently utilized to shore-up floating/contingent provision buffer to the tune of Rs 10,700 crore, noted Emkay Global, making its balance sheet much more resilient.
"With liquidity improving, HDFC Bank guides to further accelerate growth in H2FY26, in line with the system, and outpace the system growth in FY27 and thus reduce the growth gap with large peers," added the brokerage. It maintained its 'buy' call; hiked the target price to Rs 2,300 per share.
HDFC Bank posted a steady quarter with a slight earnings beat due to tax reversals. The NIMs contracted 11 bps QoQ and is expected to moderate further in 2Q due to the rate cut impact, according to Motilal Oswal.
"Business growth aligns with the bank’s strategy to reduce the C/D ratio consistently, though the bank indicated it would improve its credit growth trajectory moving forward," added the brokerage, maintaining its Rs 2,300 price target and 'buy' rating.
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