HDFC Bank Q3 Results | UBS Sees Favorable Risk-Reward for HDFC Bank, While HSBC Lowers Target After Q3

HDFC Bank Q3 Results | HSBC has lowered its FY26-27 EPS estimates for HDFC Bank by 4-5%, citing lower loan growth and pressure on net interest margins (NIM). Despite this, none of the analysts covering HDFC Bank have assigned it a “sell” rating after the December quarter results.

Analyst ratings

• 41 out of 48 analysts have assigned a “buy” rating, and the rest have advised “hold”.
• UBS has maintained a “buy” rating with a price target of ₹2,100, highlighting HDFC Bank’s favorable risk-reward at a 15% discount to ICICI Bank’s valuation.
• Macquarie and Bernstein have assigned an “outperform” rating with a highest price target of ₹2,300, citing good results, healthy asset quality and positive EPS growth trajectory.
• CLSA has a “hold” rating with a low price target of ₹1,875, noting challenges in loan growth and moderate loan-deposit ratio recovery.

Q3 highlights

• Profit and earnings: HDFC Bank’s net profit and net interest income (NII) met expectations. Year-on-year, profit before tax (PBT) grew 12%.
• Asset quality: Asset quality deteriorated slightly, with slippages increasing by ₹1,000 crore compared to the previous quarter.
• Management insights: CEO Sashidhar Jagdishan acknowledged challenges such as tight liquidity, subdued urban demand and weak private capex, but pointed to improving rural demand and higher government spending.

Brokerage views

• UBS sees growth potential but stresses the importance of an inflection point in loan growth.
• Macquarie believes NIM will improve once liquidity conditions stabilise, repo rates are reduced and CASA improves.
• CLSA believes the increase in slippages is manageable under current conditions and NIM contraction is expected.

Stock Performance

Following the results, HDFC Bank shares rose 1.8% on Wednesday, becoming a major contributor to the Nifty 50 index. Its US-listed shares (ADRs) also rose 3% overnight.

While near-term growth is expected to face challenges, analysts remain largely optimistic about HDFC Bank’s long-term prospects, especially when the macroeconomic environment improves.

Also Read: Trent Share Price | This stock of Tata Group made investors cry, the stock fell 18% in 15 trading sessions