Why Does Prabhudas Lilladher Expect HDFC Bank to Climb Toward ₹1150?
HDFC Bank continues to reaffirm its position as India’s leading private sector lender, with Prabhudas Lilladher projecting an upside potential toward ₹1150. The brokerage highlighted that the bank’s Q2 performance reflected operational strength, best-in-class asset quality, and disciplined provisioning practices. A 1.8% higher-than-expected core PAT of ₹156.5 billion was achieved despite setting aside a contingent provision — a testament to its resilient balance sheet and prudent risk management.
The bank’s credit growth, stable margins, and improving recovery trends have reinforced investor confidence heading into FY26, prompting analysts to reiterate a bullish stance.
According to Prabhudas Lilladher’s note, HDFC Bank’s quarterly performance stood out due to a strong operating profile and superior credit discipline. The lender’s asset quality remained best-in-class, aided by lower slippages and higher recoveries, even as it reversed a ₹20 billion NPA provision. The brokerage expects continued traction in core profitability, supported by balance sheet expansion and stable funding costs.
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With a strong franchise, diversified asset mix, and growing retail footprint, HDFC Bank continues to deliver consistent earnings despite a challenging macro environment. The bank’s cost of funds remains stable, and incremental deposits are being deployed efficiently into high-yield lending segments. The improved CASA ratio further strengthens liquidity metrics.
Key highlights from Prabhudas Lilladher’s Q2FY26 analysis of HDFC Bank are presented below:
| Metric | Q2FY26 Value | Highlights / Notes |
|---|---|---|
| Core PAT | ₹156.5 billion | 1.8% above estimates despite provisioning |
| NPA Provision Reversal | ₹20 billion | Improved recoveries, lower slippages |
| Asset Quality | Best-in-class | Driven by lower credit cost, strong recoveries |
| Loan Growth | Steady | Retail and SME continue to drive expansion |
| Target Price | ₹1150 | Valuation multiple expansion expected |
The report also emphasizes that HDFC Bank’s credit costs are well-contained, while its net interest margins (NIM) remain resilient despite a competitive deposit environment. Analysts see continued margin stability aided by product repricing and the gradual tapering of funding costs.
Furthermore, the bank’s digital initiatives and cross-selling ecosystem have accelerated customer acquisition and improved fee income. With its consistent earnings visibility and strong capital adequacy, HDFC Bank remains the preferred pick among large-cap financials for long-term investors.
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Valuations are seen to rerate further as the bank continues to deliver double-digit earnings growth with a healthy return on equity (RoE). The brokerage maintains that HDFC Bank’s operating leverage, scale advantage, and digital expansion will keep it ahead of peers even in a rising rate environment.
Going forward, the key monitorables include deposit growth trajectory, competitive cost of funds, and NIM sustainability. However, analysts remain confident that HDFC Bank’s size, quality, and execution excellence justify its premium valuation multiple.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, notes that HDFC Bank’s steady growth in core profitability and best-in-class asset quality underscore its leadership among private lenders. With structural strengths intact and loan growth visibility improving, the target of ₹1150 appears achievable within FY26. Investors with a medium to long-term horizon may consider accumulating on dips.
Discover more insightful research and professionally curated guidance at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on HDFC Bank Outlook
- What Are the Key Drivers Behind HDFC Bank’s 1.8% Core PAT Growth?
- Why Did Prabhudas Lilladher Revise Its Target to ₹1150?
- How Strong Is HDFC Bank’s Asset Quality Compared to Peers?
- What Role Does NPA Provision Reversal Play in Profitability?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
