Stay 'Neutral' On HDB Financial Services Stock Maintains Motilal Oswal Post Weak Q2 — Check Target Price

HDB Finance’s Q2 FY26 PAT declined ~2% YoY to Rs 5.8 billion (in line). PAT in H1 FY26 declined ~2% YoY, and we expect H2 FY26 PAT to grow ~45% YoY. NII in Q2 FY26 grew ~20% YoY to ~Rs 21.9 billion (in line). Other income rose ~14% YoY to ~Rs 6.6b (in line)..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.HDB Financial Services Ltd. reported a muted quarter, with modest loan growth and disbursement activity impacted by factors such as heavy rainfall and demand deferment ahead of anticipated GST rate cuts. Asset quality weakened further, resulting in sequentially higher credit costs. The only positive was a ~20bp expansion in NIM during the quarter, driven by a decline in the cost of borrowings. HDB Financial offers a play on India’s high-growth, underpenetrated retail lending market. With an AUM of ~Rs 1.11 trillion and ~21 million customers, the company has built a granular, largely secured loan portfolio (~73% secured) and demonstrated credit discipline. With strong governance, in-house collections, and a differentiated sourcing model, the company has the foundations for sustainable value creation.  HDB Financial Services currently trades at 2.5x FY27E P/BV. We estimate a CAGR of 12%/17%/24% in disbursement/AUM/PAT over FY25-28, with RoA/RoE of ~2.5%/15% in FY27. Reiterate Neutral with a target price of Rs 820 (premised on 2.6x Sep’27E BVPS). With valuations largely factoring in medium-term growth potential, we will look for clearer evidence of stronger execution on loan growth, the ability to better navigate industry/product cycles, and structural (not just cyclical) improvement in return ratios..Click on the attachment to read the full report:.HDFC Life Q2 Review — GST Impact Emerges As A Margin Monitorable, Says Yes Securities Maintaining 'Add'.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Stay 'Neutral' On HDB Financial Services Stock Maintains Motilal Oswal Post Weak Q2 — Check Target Price

HDB Finance's loan growth was muted and credit costs remained elevated, adds Motilal Oswal.

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