HDFC Bank shares fall nearly 5% post Q1 results; analysts bullish

HDFC Bank reported a 5 per cent increase in standalone profit for the first quarter to ₹19,060 crore on a year-on-year basis. Total deposits increased 14.7 per cent Y-o-Y to ₹31.71 trillion

HDFC Bank Q1 results review: Largest domestic private sector lender, HDFC Bank, over the weekend reported an in-line June quarter (Q1FY27) result, analysts said. The bank's earnings saw a decline in other income with respect to a gain from the HDB Financial Services stake sale in the comparable quarter. 

 

However, the lender's counter came under pressure on Monday. At 9:23 AM, HDFC's share price was trading 4.67 per cent lower at ₹781.80 per share on the NSE. In comparison, Nifty 50 was down 0.60 per cent at 24,191.45. In intraday trade, the counter declined 4.76 per cent to touch the day's low at ₹780 per share.

 

 

HDFC Bank Q1FY27 results highlights 

 

• The bank reported a 5 per cent year-on-year rise in standalone net profit to ₹19,060 crore for the quarter ended June (Q1FY27)
• Net interest income increased 6.7 per cent Y-o-Y to ₹33,535 crore in Q1FY27 from ₹31,438 crore a year earlier.
• Other income declined 41 per cent Y-o-Y to ₹12,821 crore, compared with ₹21,729 crore in the corresponding quarter last year, which included the gain from the HDB Financial Services stake sale.
• The bank's net interest margin (NIM) narrowed to 3.26 per cent in Q1FY27 from 3.38 per cent in the March quarter.
• Provisions and contingencies stood at ₹3,060 crore during the quarter, compared with ₹2,609 crore in Q4FY26 and ₹14,441 crore in the year-ago period.
• Asset quality weakened marginally during the quarter. Gross non-performing assets (GNPAs) rose to 1.17 per cent as of June 30, 2026, from 1.15 per cent at the end of March
• Total deposits increased 14.7 per cent Y-o-Y to ₹31.71 trillion at the end of June. CASA deposits rose 9.4 per cent to ₹7.01 trillion, comprising ₹3.76 trillion of savings account deposits and ₹3.25 trillion of current account deposits

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Brokerages’ view on HDFC Bank post Q1 Results

 

Motilal Oswal Financial Services | Buy | Target ₹1,050

 

MOFSL reiterated its 'Buy' call for the bank's counter, noting that HDFC reported a largely in-line quarter, supported by healthy business growth and lower provisions, "although NIM remained the key miss, contracting 12bp QoQ".

 

Loan growth was driven by the SME and corporate segments, while retail loan growth remained relatively modest. Deposit growth stayed healthy at 14.7 per cent Y-o-Y and 2.1 per cent Q-o-Q, resulting in the credit-deposit  ratio inching up to 95.8 per cent. 

 

"We expect the credit-deposit ratio to gradually moderate to 92–93 per cent by FY28E through calibrated balance sheet management. The bank continues to maintain contingency and floating provisions of ₹156 billion and ₹214 billion, respectively," the brokerage said.

 

Combined with improving operating leverage, MOFSL expects a gradual improvement in profitability and return ratios over the coming years. The brokerage has lowered its earnings estimates for HDFC Bank by 2 per cent each for FY27 and FY28, but continues to maintain a 'Buy' rating on the stock. The brokerage expects the bank to deliver a return on assets (RoA) of 1.84 per cent and a return on equity (RoE) of 14.7 per cent in FY28. It has retained a target price of ₹1,050, valuing the standalone bank at 2.1 times its estimated FY28 adjusted book value (ABV).

 

Nirmal Bang | Buy | Target ₹1,020

 

Nirmal Bang noted that the bank's business growth remained robust with loans growing 16 per cent year-on-year and 3 per cent quarter-on-quarter. Meanwhile, deposits grew 15 per cent Y-o-Y and 2 per cent Q-o-Q. Operating expenses remained well controlled at over 4 per cent Y-o-Y.

 

It further added that going forward, healthy credit demand should sustain loan growth momentum, while productivity gains are expected to drive operating leverage. Asset quality remains comfortable, with existing provisions considered adequate for the upcoming ECL transition and no material increase in credit costs is expected. 

 

Nirmal Bang has reiterated a 'Buy' rating on HDFC Bank with a target price of ₹1,020. The brokerage values the standalone bank at 2.0 times its estimated June 2028 adjusted book value (ABV).

 

Systematix | Buy | ₹950

 

The brokerage maintained its 'Buy' rating for HDFC Bank with an unchanged target price of ₹950. Systematix has maintained a positive view on HDFC Bank, valuing the standalone bank at 1.6 times its estimated FY28 adjusted book value (ABV). The brokerage expects the bank to deliver a return on equity (RoE) of 13.8 per cent in FY27 and 14.5 per cent in FY28

 

Systematix noted that the bank's management maintained a constructive medium-term outlook on margins, reiterating that the primary earnings lever remains funding cost normalization rather than asset repricing. 

 

The brokerage also highlighted management's expectation of portfolio mix optimisation, with the retail loan mix gradually increasing from the current 52 per cent toward the long-term target of 60 per cent, along with CASA improvement, to support structural NIM expansion over the medium term.

 

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