HDFC Bank shares jump 3% on Q2 beat, IPO nod. Should you buy, sell or hold?
HDFC Bank on Monday jumped 3% to Rs 1,734 on BSE after India's largest private sector lender reported steady performance in Q2 with PAT growth of 5.3% year-on-year (YoY) beating Street estimates.
HDFC Bank's board approval to launch the IPO of its NBFC subsidiary – HDB Financial Services — to the tune of Rs 12,500 crore (including OFS of Rs 10,000 crore) to meet regulatory guidelines will also unlock value for shareholders.
Global brokerage firm Goldman Sachs has retained a 'buy' call on the stock with a target price of Rs 2,156 citing in-line core operating profits and a slight beat on PAT in its Q2 with strong quality and better visibility of earnings.
Motilal Oswal estimates HDFC Bank to report a gradual recovery in loan growth over FY25-27E with earnings growth accelerating faster. «We thus estimate HDFC Bank to deliver FY26E RoA/RoE of 1.8%/14.6%,» it said while giving a target price of Rs 2,050.
During the quarter, HDFC Bank's NII grew 10% YoY, while NIMs saw a marginal decline of 1bp QoQ to 3.46% despite a rise in cash and bank balances. Other income grew 7.2% YoY/7.6% QoQ amid better core fee income.
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