Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 19 Nov, 25 | HDB | Buy | USD 37.13 | USD 39.0 | USD 40.8 | 47 days | Closed |
6.76%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in three segments: Wholesale Banking, Retail Banking, and Treasury Services. It accepts savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, fixed deposits, rental receivables, and assets; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital and commercial/construction equipment finance, healthcare/medical equipment and commercial vehicle finance, dealer finance, and term loans. In addition, it offers credit, debit, prepaid, and forex cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, and documents collection services; online and wholesale, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; and channel financing, vendor financing, reimbursement account, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services, as well as financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.
Strong YoY Profit Growth: Profit after tax increased from ₹16,821 crore in Q2 FY25 to ₹18,641 crore in Q2 FY26, reflecting a YoY increase of ₹1,820 crore (approx. 10.8%)
Rise in Net Interest Income: Net interest income improved from ₹301.1 billion in Q2 FY25 to ₹315.5 billion in Q2 FY26, marking a YoY increase of ₹14.4 billion (approx. 4.8%)
Higher Provisions YoY: Provisions rose from ₹27.0 billion in Q2 FY25 to ₹35.0 billion in Q2 FY26, an increase of ₹8.0 billion (approx. 29.6%), excluding the unusually high provisions of Q1 FY26
Decline in Cost of Funds Advantage: Cost of funds increased from 4.9% in Q2 FY25 to 4.6% in Q2 FY26, but yield on assets decreased notably from 8.3% in Q2 FY25 to 7.8% in Q2 FY26, indicating 50 basis points of YoY compression in asset yields, pressuring NIMs
HDFC Bank’s key investment risk is the potential for continued margin compression due to slower repricing of high-cost deposits in a declining rate environment, which may pressure profitability despite strong loan growth
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 37.13 | 34.8 | 39.0 | 40.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Solid Financial Performance in Q2 FY26: HDFC Bank reported a strong financial outcome for Q2 FY26, supported by steady revenue growth and robust profitability. Total income for the quarter increased to ₹91,041 crore, reflecting an improvement from the previous year driven by higher interest income and healthy growth in non-interest revenue. The bank’s operating profit also strengthened, underpinned by disciplined cost management and stable core operating metrics.
Stable Growth in Advances and Deposits: The bank registered healthy momentum in balance sheet expansion, with gross advances rising 9.9% year-on-year to ₹27,692 billion, and deposits increasing 12.1% year-on-year to ₹28,018 billion as of September 2025. Average deposits grew 15.1% year-on-year and 2.0% sequentially, supported by strong traction across retail and wholesale segments. Advances under management grew 8.9% year-on-year, with balanced growth across retail, SME, and corporate portfolios.
Margin Movement and Earnings Resilience: Net interest income for the quarter stood at ₹315.5 billion, marking a 4.8% increase compared with Q2 FY25. The bank reported a net interest margin (NIM) of 3.27%, reflecting an 8-basis-point sequential moderation influenced by the front-loaded impact of policy rate cuts on the asset side. However, management expects deposit repricing benefits to positively support NIM over the next 6–12 months as funding costs gradually decline.
Operating Efficiency and Cost Discipline: Operating expenses for Q2 FY26 amounted to ₹17,978 crore, indicating a controlled increase of 6.4% over the previous year. The cost-to-income ratio improved to 39.2%, supported by revenue expansion and efficiencies arising from ongoing technology and distribution investments. The bank highlighted the medium-term benefits of platform modernization and GenAI-enabled process re-engineering initiatives that are expected to drive further operating leverage.
Strong Asset Quality and Provision Buffering: HDFC Bank sustained its resilient asset quality metrics, with gross NPAs declining to 1.24% and net NPAs stable at 0.42%. Recoveries included a one-off upgrade contributing approximately 10 basis points to the improvement in GNPA. The bank also strengthened its provision buffers by adding approximately ₹1,600 crore to contingent provisions during the quarter, reinforcing its conservative risk stance in a volatile macro environment.
Capital Strengthening and Liquidity Position: The capital adequacy ratio stood at 20.0%, including CET-1 at 17.5%, providing ample capacity to support future growth. Liquidity coverage ratio remained robust at 120%, comfortably above regulatory requirements. Management reiterated that strong internal accruals allow the bank to support growth ambitions without immediate need for external capital, while strategic focus on retail and secured lending ensures sustainable risk-adjusted returns.
Outlook Supported by Improving Economic Activity: Management highlighted emerging signs of economic strengthening driven by fiscal stimulus, GST adjustments, and early impacts of rate cuts. With credit demand improving across sectors and deposit traction remaining healthy, the bank expects growth momentum to accelerate in FY27. Continued investment in technology, disciplined pricing, and stable asset quality position HDFC Bank to capitalize on improving macro conditions.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on HDFC Bank Limited (NYSE: HDB) at the closing market price of USD 37.13, as on Nov 18, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Banks - Regional
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | |
|---|---|---|---|---|---|---|---|
| HDB HDFC Bank Limited ADR |
-0.155 0.46% | 33.63 | 20.81 | 20.96 | 0.11 | 4.77 | |
| CIHKY China Merchants Bank Co Ltd |
-0.51 1.65% | 30.31 | 6.61 | 5.68 | 0.48 | 0.77 | 3.43 |
| IBN ICICI Bank Limited |
-0.255 0.83% | 30.50 | 17.79 | 16.95 | 0.07 | 3.08 | |
| BNPQY BNP Paribas SA ADR |
-0.32 0.58% | 54.43 | 8.57 | 6.56 | 1.75 | 0.57 | |
| BNPQF BNP Paribas SA |
-0.13 0.12% | 106.33 | 8.56 | 6.56 | 1.73 | 0.57 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on November 19, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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