HDFC Bank Share Price Target: Share Hits All-Time High On MSCI Rejig - Buy More?

Buy Rating on HDFC Bank: The shares of India’s biggest private lender HDFC Bank’s stock zoomed to an all-time high of Rs 1,803.55 apiece on Monday as the broader market rallied in a post-BJP election win in Maharashtra.

The share of the company gained as much as 1.91 per cent or 33.35 points higher in today’s trade to settle at Rs 1,778.95 on BSE.

HDFC Bank Share Price Target

The stock brokerage firms have also shared an upside for the company’s stock with Kotak Institutional Equities raising the target price to Rs 1,900 per share against the current market price of Rs 1,778.95, giving it a BUY rating on November 25.  

In a more optimistic outlook, the stock broking firm Nirmal Bang is looking for a 19 per cent upside in the HDFC Bank share price with a target price of Rs 2,026 per share.

The global investment bank Goldman Sachs also believes that macros align with the company’s growth prospects with higher-than-expected GDP growth, retail consumption trends, and private capex opportunities that could lead to better-than-expected credit growth.

“Bottoming of earnings downgrades for the banks driven by better-than-expected margin trajectory coupled with lower-than-expected deterioration in asset quality could be another catalyst. Additionally, the valuation multiples also look quite compelling, with Bank NIFTY trading at a steep discount to index valuations and our BUY-rated names such as HDFC Bank and Kotak Mahindra Bank trading at a substantial discount to their historical average valuations,” Goldman Sachs said about HDFC Bank on November 19.

Rural Penetration, Credit Growth To Drive Earnings

HDFC Bank continues to outpace the system in terms of deposits growth by growing at 15-16 per cent. It will grow its credit below the system growth in FY25 (system credit growth is expected to be 11 per cent in FY25 and around the system credit growth in FY26, which will lead to a further decline in the C/D ratio, Nirmal Bang noted.  However, the brokerage firm also shared that post-Covid, HDFC Bank is yet to see a meaningful pickup in the revolver rates. 

The bank has also expanded its operations in rural India, moving from 65,000 villages, 4-5 years back to over 2,30,000 villages. It is adding around 20,000-40,000 villages on an annual basis in the CRB segment.