HDFC Bank delivered a resilient performance, with enhanced profitability supported by lower provisions and steady NII growth. While the bank’s margin expanded on a stronger retail loan mix, it is expected to remain under pressure in the near term owing to repo rate cuts. However, by improving cost efficiency and maintaining sufficient provisioning, the bank’s profitability is likely to remain stable. Moreover, given its stringent credit underwriting policies and seasoned unsecured portfolio, the bank witnessed an improvement in asset quality and is expected to remain healthy going forward. Furthermore, with an adequate capital base, innovative digital solutions and extensive branch network the bank is wellpositioned to capture mid to long-term growth opportunities, given easing liquidity conditions.
OutlookHence, with an optimistic outlook, we maintain our BUY rating on the stock, based on 2.6x FY27E BVPS with a target price of ₹2,173.
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