Strong Q2 Results Lift HDFC Bank to 52-Week High, Brokerages Raise Targets

HDFC Bank Shares Rally on Q2 Earnings Beat

HDFC Bank shares surged to a fresh 52-week high on Monday, following the release of its Q2 FY26 results, which exceeded market expectations. The stock traded at ₹1,020 on the NSE, rising 1.74% intraday, and has advanced over 3% in the past four sessions, reflecting strong investor confidence.

The lender’s market capitalization stood at ₹15,45,050.35 crore, underscoring its position as the largest private sector bank in India.

Q2 FY26 Performance Highlights

HDFC Bank delivered steady financial performance, supported by robust loan growth and strong core earnings:

• Net Interest Margin (NIM): 3.27%, slightly down from 3.35% in Q1 FY26.

• Loan Growth: 9.9% YoY, reflecting continued credit demand across retail and corporate segments.

• Trading and Non-Interest Income: Higher gains from treasury operations bolstered revenue.

• Asset Quality: Maintained robust, with NPAs well-managed.

Analysts cited the bank’s superior asset quality, disciplined growth, and stable margins as key positives supporting long-term performance.

Also Read : Reliance Industries Shares Jump 3% on Strong Q2 Results; Brokerages Stay Bullish

Brokerage Sentiment Remains Positive

Following the results, at least 10 brokerages raised price targets for HDFC Bank. The stock carries an average “buy” rating from 38 brokerages, with a median target price of ₹1,150, implying an upside of more than 12% from current levels.

Nuvama Institutional Equities

Nuvama expects NIMs to improve from Q3 FY26, highlighting the bank’s strong balance sheet and resilient core earnings as key growth drivers.

Macquarie

Macquarie noted that sustained loan growth and improving NIMs could support a re-rating of HDFC Bank stock, reinforcing bullish sentiment.

The brokerage consensus reflects confidence in the bank’s ability to maintain steady growth while safeguarding asset quality, even amid broader market volatility.

Key Drivers Behind Q2 Performance

1. Steady Loan Growth: Strong credit demand drove 9.9% YoY loan expansion.

2. Robust Net Interest Margin: Maintained healthy margins, with prospects of improvement in upcoming quarters.

3. Higher Trading Income: Treasury operations boosted non-interest revenue.

4. Strong Asset Quality: Low NPAs and prudent risk management instill investor confidence.

5. Positive Broker Guidance: Upgraded price targets and buy ratings reinforce bullish sentiment.

“HDFC Bank continues to deliver consistent growth backed by superior asset quality and a strong loan book. With improving NIMs and sustained trading income, the stock remains a top pick for long-term investors,” said a Mumbai-based equity analyst.

Market Context: Banking Sector Performance

HDFC Bank’s gains coincided with positive sentiment in the broader Indian banking sector, where major private banks saw mixed but generally upward movement:

• ICICI Bank: Shares dipped slightly after Q2 results but remain supported by strong NII and improving asset quality.

• Axis Bank: Marginal gains on expectations of steady credit growth and controlled NPAs.

• Kotak Mahindra Bank: Traded flat, reflecting stable earnings with limited surprises.

Overall, Nifty Bank index rose modestly, supported by robust earnings from private lenders and foreign fund inflows. Investors are selectively focusing on high-quality banks with stable margins and improving balance sheets.

Analyst Outlook

HDFC Bank’s strategic initiatives, including expansion of digital services, retail banking penetration, and stable trading income, are expected to support growth in FY26 and beyond.
Market watchers anticipate HDFC Bank’s performance will remain resilient, driven by its balance of retail and corporate banking, strong capital adequacy, and stable profitability.

Analysts also highlighted the potential upside from rising loan yields, improving cost of funds, and treasury gains, which could further strengthen earnings in the coming quarters.

Conclusion

HDFC Bank’s Q2 FY26 results demonstrate its ability to combine steady loan growth with robust profitability and sound asset quality, keeping investor sentiment positive.
With brokerage upgrades, strong fundamentals, and positive sector momentum, HDFC Bank shares remain a high-conviction buy in India’s banking sector.

Investors eyeing long-term growth and stable returns may find HDFC Bank an attractive option, especially amid broader market volatility and selective banking opportunities.

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