Bernstein has reiterated its Outperform rating on HDFC Bank, forecasting a 25% upside with a target price of Rs 2100. The bank’s performance in Q2 FY25 showed strong resilience, resembling its pre-2020 stability, despite industry challenges like Net Interest Margin (NIM) declines and rising credit costs affecting peers.
Bernstein highlighted key positives such as improvement in Return on Assets (RoA), stable NIM, higher CASA growth compared to competitors, and stable credit costs. The bank also reported moderate operating expense growth of 10% year-on-year, despite the addition of 250 new branches during the quarter. However, slow loan growth continues to be a known downside.
Although HDFC Bank has room to improve its RoA and growth metrics, Bernstein believes it is steadily closing the gap and presents a reliable long-term opportunity.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Please consult a financial advisor before making any investment decisions.
