HDFC Bank Q2 Results: Jefferies Raises Price Target On Strong Loan Growth, Margin Outlook

Improving loan growth and a positive margin outlook are some of the key driving factors behind HDFC Bank's earnings upgrade, Jefferies noted after the lender reported its September quarter results for the financial year ending March 2026 on Saturday.

India's largest private sector bank reported an 11% year-on-year rise in net profit for the September quarter to Rs 18,641 crore, compared with Rs 16,821 crore a year earlier. Sequentially, profit increased 3%.

HDFC Bank's profit rose on higher income and improved asset quality, even as other income fell and provisioning costs increased on a yearly basis.

• Profit up 10.8% to Rs 18,641 crore versus Rs 16,821 crore.

• Net interest income up 4.8% to Rs 31,552 crore versus Rs 30,114 crore.

• Provisions up 30% to Rs 3,501 crore versus Rs 2,700 crore.

• Gross NPA ratio down 16 bps to 1.24% versus 1.40% (QoQ).

• Net NPA ratio down 5 bps to 0.42% versus 0.47% (QoQ).

• Other income up 25% to Rs 14,350 crore versus Rs 11,483 crore

In light of a strong quarter, Jefferies has maintained a 'buy' rating on HDFC Bank while hiking the target price from Rs 1,200 to Rs 1,240.

The brokerage firm highlighted the bank's strong loan growth and improving margin outlook, as mentioned earlier.

Jefferies added that asset quality improvement was led by corporate recovery, while deposit growth could be a key monitorable going forward.

The brokerage has also lifted HDFC Bank's earnings estimates by 2-6%, adding that the lender remains one of its top picks in the sector.

Morgan Stanley, too, has come out with a note on HDFC Bank, retaining an 'overweight' call with an unchanged target price of Rs 1,225.

The firm also noted the lender's improving loan growth and robust asset quality, which is coupled with strong market share - making HDFC Bank one of the most attractive bets in the space.