HDFC Bank gets 'Buy' again from Nomura, target price tweaked; here's why

Japan-based brokerage Nomura has maintained its ‘Buy’ rating on HDFC Bank stock, following the lender’s pre-September quarter (Q2FY26) update, on robust loan growth that underpins a strong business outlook. 

 

On the bourses around 9:30 AM, HDFC Bank share price was trading 0.25 per cent higher at ₹967.20 per share. In comparison, BSE Sensex was trading 0.07 per cent higher at 81,261.47 levels.

 

In the quarter, HDFC Bank reported gross advances rising 3.1 per cent quarter-on-quarter (Q-o-Q) and 8.9 per cent year-on-year (Y-o-Y). Net of loan sell-down through interbank participatory certificates (IBPC), gross loan growth was even stronger at 4.4 per cent Q-o-Q and 9.9 per cent Y-o-Y, reflecting sustained demand across retail and wholesale segments.

 

Deposit growth, however, was softer, with total deposits rising 1.4 per cent Q-o-Q (12.1 per cent Y-o-Y). Growth in CASA deposits was modest at 1.3 per cent Q-o-Q (7.4 per cent Y-o-Y), while term deposits rose 1.4 per cent Q-o-Q (14.6 per cent Y-o-Y). The CASA ratio remained stable at 33.9 per cent, and the loan-to-deposit ratio (based on gross loans) increased by approximately 285 basis points Q-o-Q to 99 per cent.

 

Following HDFC Bank’s recent 1:1 bonus issue (record date Aug 27, 2025), Nomura has revised its target price to ₹1,095, down from ₹2,190 previously, while maintaining its ‘Buy’ rating. The revised target values the core bank at 2.3x June-27F book value per share (BVPS) using a two-stage Gordon Growth Model, with subsidiaries contributing 120 per share. 

 

“HDFC Bank delivered strong loan growth in Q2, and remains well poised to grow at system credit growth or slightly higher by FY26F. Post HDFC Bank’s bonus issue of 1:1 (record date August 27, 2025), we revise our TP accordingly to ₹1,095 (from ₹2,190 previously),” said Ankit Bihani, research analyst at Nomura.

 

Nomura noted that HDFC Bank is well-positioned to sustain credit growth at system levels or slightly higher through FY26. 

 

However, downside risks include potential weakness in deposit mobilisation, which could impact the bank’s loan growth trajectory, and pressure on margins if the operating environment softens. 

 

That said, analysts at Nomura see HDFC Bank as a high-quality franchise with strong fundamentals, resilient loan growth, and healthy capital, making it a compelling long-term investment opportunity.

 

HDFC Bank, India’s largest private sector bank, was incorporated in August 1994 and commenced operations in January 1995 after receiving approval from the Reserve Bank of India. Headquartered in Mumbai, the bank offers a wide range of financial products and services across retail, wholesale, and treasury banking. Known for its extensive branch and ATM network in India, HDFC Bank also maintains an international presence, serving customers through a strong digital and physical infrastructure.  

 

The bank operates through three primary segments. Retail Banking caters to individual customers with savings, loans, and other personal financial services. Wholesale Banking provides commercial and transactional banking solutions to businesses, while the Treasury segment manages foreign exchange, derivatives, money market instruments, debt, and equity services. 

 

HDFC Bank’s market capitalisation is ₹14,82,904.18 crore, according to BSE.