HDFC Bank Update: What Does Nomura’s Bold Prediction Say?
After the lender’s strong pre-Q2FY26 performance update, Japan-based brokerage Nomura has reiterated its “Buy” recommendation on HDFC Bank. Nomura’s optimistic outlook is supported by strong loan growth, despite the target price being lowered from ₹2,190 to ₹1,095. Adjustments following HDFC Bank’s recent 1:1 bonus issue are reflected in the modification. Currently, HDFC Bank trades near ₹967.20, a little ahead of benchmark averages.
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),
Ankit Bihani, research analyst at Nomura
Nomura Highlights HDFC Bank’s Robust Fundamentals and Credit Growth Outlook
Gross advances increased 8.9% year over year (Y-o-Y) and 3.1% quarter over quarter (Q-o-Q), according to HDFC Bank. Growth was 9.9% Y-o-Y and 4.4% Q-o-Q net of loan sell-downs. This indicates a persistent demand in both the retail and wholesale markets. Term deposits gained 1.4% on a quarter-over-quarter basis, while CASA deposits increased 2.3%. HDFC Bank is in a strong position, according to Nomura, to sustain credit growth at or above system levels through FY26. As important factors in maintaining the bank’s favorable rating, analysts also point to its solid capital structure, robust loan growth, and solid fundamentals.
HDFC Bank’s Strong Branch Network and Capital Strength Offset Short-Term Risks
Nomura reduced its target price to ₹1,095 after the bonus issuance, pricing the bank at 2.3 times the June-27F book value per share (BVPS). This indicates changes in value while keeping an optimistic outlook. Slower deposit mobilization and margin pressures in the event that operating conditions improve are examples of downside risks. Nonetheless, Nomura cites HDFC Bank’s broad branch network, robust capital sufficiency, and diverse retail and wholesale banking businesses as key advantages. Despite short-term changes, these features make the bank an attractive option for long-term investors.
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