Multiple brokerages maintain contrasting views on HDFC Bank with ICICI Securities issuing a buy rating on the stock with a target price of ₹1,020 in its research report dated July 19, 2026, while Anand Rathi has assigned a buy rating with a lower target price of ₹963. According to the latest analysis, the bank's Q1FY27 performance showed weak PAT of ₹191 billion (up 5% YoY, 5% miss) as NIM, CASA and RoA moderated to multi-quarter lows. Despite accelerating loan growth and contained opex, the weak mix in favor of wholesale for both loan and deposits led to contained NII growth of 7% YoY/1% QoQ.
In FY26, HDFC Bank achieved significant growth metrics with its loan book expanding by 12.1% while reducing its credit-to-deposit ratio to 94.6% from 96.5%. As reported by Motilal Oswal, growth was primarily driven by the small and mid-market segment (+17% YoY), while growth in the unsecured segment remained calibrated. The bank's liability franchise remains robust, supported by granular deposit mobilization, improving technology capabilities, and stronger cross-selling initiatives. Recent Q1FY27 data shows loan/deposits grew at healthy pace of ~3%/2% QoQ, defying usual seasonality patterns, though ex-agri slippages grew 13% QoQ.
The recent FCNR(B) scheme positions HDFC Bank advantageously to tap its large customer franchise and garner sizeable FCNR deposits. According to Motilal Oswal's analysis, the share of borrowings in the total balance sheet has declined to 11% as of March 2026, compared to the peak of 18% post-merger. The brokerage expects this ratio to further decline to 8% by FY28, supporting lower cost of funds and margin reflation. However, HDFC Bank's credit growth remained well below peers such as ICICI Bank and Axis Bank despite some pick-up to 15.5% YoY, with NIM declining 13bps QoQ and further widening the margin gap versus ICICI Bank. Asset quality remained broadly stable, but the bank has been unable to close the post-merger gap with ICICI across key operating metrics including NIM, loan growth and CASA ratio.
Motilal Oswal estimates HDFC Bank to deliver a loan CAGR of 14.1% over FY26-28, alongside an earnings CAGR of 14.2%. The brokerage projects FY28E RoA/RoE of 1.9%/14.9% respectively. Operating leverage is expected to improve through the ramp-up of branches over recent years, organizational restructuring on the asset side, improving employee productivity via cross-selling of products, and embedding AI across the bank's operations. However, Anand Rathi notes that it will take longer for the bank to narrow the funding cost gap with ICICI given that CASA growth continues to lag loan growth, and consequently, loan growth or RoE to sustainably exceed 14% over the medium term is not expected. ICICI Securities has lowered its target price to ₹1,020 (vs. ₹1,080), valuing the stock at ~2x FY28E core ABV versus ~2.1x earlier.
