HDFC Bank shares have rebounded over 4% in September after hitting a 52-week low of ₹682 on September 11. The banking stock rose 1.49% to ₹740 on September 21, becoming the top contributor to Sensex gains as it looks set to snap its two-month losing run. Despite the recent recovery, the stock has declined 27.5% from its one-year peak and 25.3% year-to-date. The stock's performance contrasts with the broader market, as the Sensex fell nearly 3% during the same period, highlighting HDFC Bank's relative strength in recent trading sessions.
Multiple experts now recommend HDFC Bank as a buy for long-term investors, with Vinit Bolinjkar from Ventura stating that "with the stock trading near multi-quarter lows and core fundamentals intact, the risk-reward favours accumulation for investors with a 12-18 month horizon." Technical analysts identify strong bullish signals, with Jigar S. Patel from Anand Rathi noting that HDFC Bank has formed a bullish divergence on the weekly RSI and hammer candlestick formation in the ₹680-700 zone. The combination of these technical indicators suggests potential recovery toward ₹800-820 over the next 5-6 months. Vipin Kumar from Globe Capital Market believes the stock is expected to scale toward ₹760-770, with a decisive close above ₹770 potentially triggering further upside toward the ₹790-808 gap resistance zone.
RBI granted approval to Life Insurance Corporation of India (LIC) in August to acquire an aggregate stake of up to 9.99% in HDFC Bank, marking a significant development in the banking sector. This strategic investment by India's largest life insurer provides LIC with substantial exposure to one of the country's leading private sector banks. The approval comes as LIC continues to benefit from its dominant market position with overall market share of more than 50% and maintains an overall VNB margin of 22.9% in Q1FY27, representing a 754 basis points year-on-year increase.
HDFC Bank's current valuation appears attractive at ₹740, trading at a price-to-book of nearly 2.5 times against a reported ROE of 13.6%, which experts consider a meaningful discount to historical levels. The stock trades at around 14 times earnings, below ICICI Bank at 16 times and Kotak Mahindra Bank at 20 times. By the end of Q1FY27, domestic institutions held 41.92% stake while foreign portfolio investors held 41.83% stake in the company. The stock's underperformance over the past five years, declining 4.5% in five years, 4.7% in three years, and 23.5% in the last year, has created attractive entry points for long-term investors despite healthy asset quality and resilient profitability.
As reported by Kotak Securities, Axis Bank is recommended as a buy with a current market price of ₹1,248 and face value of ₹1,600. The bank maintains a 5-6% share of system loans and operates through a diversified franchise spanning retail, commercial, and wholesale banking. Management is focusing on retail growth while maintaining capital-efficient wholesale banking, with around 90% of wholesale loans rated A or better. The bank targets loan growth of ~14% CAGR over FY27-29E and deposit growth at 13-14%, while PAT is expected to grow 19%, 16%, and 21% respectively over the same period.
