Shares of HDB Financial Ltd are in focus today after the company reported a strong set of Q4 results yesterday. The company reported a 41% year-on-year jump in Q4 net profit to Rs 751 crore, aided by healthy income growth and improving asset quality.
HDB Financial shares surged over 12% in trade today,a nd is currently trading at around 8% at 9:25 am, at Rs 696.15 apiece. However, the stock has fallen 9.03% year-to date.
In Q4, Net interest income rose 22% YoY to Rs 2,399 crore, while margins expanded sequentially, with net interest margin (NIM) coming in at 8.23% versus 8.09% in the previous quarter. The lender also announced a final dividend of Rs 2 per share.
Of the 14 analysts tracking HDB Financial, seven have a buy call, six have a hold view, and one has a sell rating on the stock.
ALSO READ: HDB Financial's Q4 Beats Estimates: Brokerages Flag Growth vs Risk Trade-Off
Jefferies maintained a ‘Buy' rating on the stock, though it trimmed its target price to Rs 845 from Rs 900. The brokerage expects a pickup in AUM growth ahead, along with lower credit costs and stable margins to drive earnings. It projects a 22% EPS CAGR over FY26–28, with return on equity expected to expand to over 15%. Management commentary also remained constructive, flagging no material impact from the ongoing West Asia conflict on growth or collections so far.
Morgan Stanley struck a more cautious note, maintaining an ‘Equal-weight' rating with a target price of Rs 720. The brokerage acknowledged consecutive earnings beats and pointed to sharply lower bad loan formation in Q4, calling it a continuation of improving trends seen since Q2. It noted that the company may be entering a “virtuous cycle” of better asset quality and earnings momentum. However, it remains wary of external risks, including geopolitical tensions in the Middle East, potential El Niño-related disruptions, and upside risks to inflation and interest rates.
ALSO READ: Jefferies Maintains 'Buy' On HDB Financial Services But Cuts Target Price — Here's Why
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