HDB Financial share price target upped after highest-ever quarterly profit in Q1
The HDB Financial management is aiming for a 2.3 per cent credit costs over the medium term and towards this the 2.4 per cent reported credit cost in 1QFY27 appears encouraging, analysts said.
- Jul 16, 2026,
- Updated Jul 16, 2026 8:53 AM IST
A couple of brokerages raised their target prices on HDB Financial Services Ltd after the HDFC Bank subsidiary reported a record profit for the June quarter. The housing finance company beat analyst estimates on total income, pre-provision operating profit (PPOP) and profit after tax (PAT) in Q1, while also reporting a healthy net interest margin (NIM) of 8.35 per cent.
Nirmal Bang Institutional Equities said HDB Finacnial demonstrated a strong start to FY27 with beat on total income, PPOP and PAT estimates. Profitability showed highly positive momentum, as the PAT surged 38.3 per cent YoY or 4.6 per cent QoQ.
"This bottom-line growth was supported by a 19.9 per cent YoY increase in NII and a healthy expansion of the NIM. Loan book grew 11.4 per cent YoY. Total quarterly disbursements also saw a solid rise of 16.2 per cent YoY. Furthermore, operational efficiencies improved with the lending business's cost-to-income ratio dropping to 39.9 per cent from 42.7 per cent in Q1 FY26," Nirmal Bang said.
The domestic brokerge said asset quality also improved with Gross Stage 3 assets declining sequentially to 2.34 per cent. Capital adequacy remained extremely robust with a CRAR of 21.29 per cent The management continues to focus on maintaining a balance between secured to unsecured mix of 74:26 on the loan book. "Our framework assigns Residual Income based fair value P/B, valuing the stock at 2.3x of its FY28E book value, maintaining a BUY rating at a target of Rs 890 (previously 870), implying an 18 per cent upside. We introduce our FY29E estimates," it said.
The HDB Financial management is aiming for a 2.3 per cent credit costs over the medium term and towards this the 2.4 per cent reported credit cost in 1QFY27 appears encouraging, analysts said.
Nomura said net slippages as a percentage of opening loans at 1.9 per cent was encouraging given the ratio was north of 2.5 per cent since its listing, except in Q4FY26. Overall, delivering return on asset (ROA) of 2.5 per cent for two consecutive quarters is healthy and in line with management’s aim over the medium term, Nomura said.
"We roll forward to Jun-27F and lift our target to Rs 790 (from Rs 740), implying 2.3x Jun-28F P/B. The stock currently trades at 2.5 times 1-year forward P/B. We maintain our Neutral rating," Nomura said.
MOFSL said HDB Financial continued to witness improvement across key operating metrics, supported by strengthening asset quality, stable credit costs, and expanding margins.
"However, overall loan growth remains relatively subdued amid segment-specific challenges. While management expects growth to improve as the benefits of initiatives undertaken over the past few quarters materialize, we would await clearer and more sustained traction in loan growth before turning constructive on the stock," MOFSL said.
The brokerage retained 'Neutral' on the stock with a target of Rs 810.
A couple of brokerages raised their target prices on HDB Financial Services Ltd after the HDFC Bank subsidiary reported a record profit for the June quarter. The housing finance company beat analyst estimates on total income, pre-provision operating profit (PPOP) and profit after tax (PAT) in Q1, while also reporting a healthy net interest margin (NIM) of 8.35 per cent.
Nirmal Bang Institutional Equities said HDB Finacnial demonstrated a strong start to FY27 with beat on total income, PPOP and PAT estimates. Profitability showed highly positive momentum, as the PAT surged 38.3 per cent YoY or 4.6 per cent QoQ.
"This bottom-line growth was supported by a 19.9 per cent YoY increase in NII and a healthy expansion of the NIM. Loan book grew 11.4 per cent YoY. Total quarterly disbursements also saw a solid rise of 16.2 per cent YoY. Furthermore, operational efficiencies improved with the lending business's cost-to-income ratio dropping to 39.9 per cent from 42.7 per cent in Q1 FY26," Nirmal Bang said.
The domestic brokerge said asset quality also improved with Gross Stage 3 assets declining sequentially to 2.34 per cent. Capital adequacy remained extremely robust with a CRAR of 21.29 per cent The management continues to focus on maintaining a balance between secured to unsecured mix of 74:26 on the loan book. "Our framework assigns Residual Income based fair value P/B, valuing the stock at 2.3x of its FY28E book value, maintaining a BUY rating at a target of Rs 890 (previously 870), implying an 18 per cent upside. We introduce our FY29E estimates," it said.
The HDB Financial management is aiming for a 2.3 per cent credit costs over the medium term and towards this the 2.4 per cent reported credit cost in 1QFY27 appears encouraging, analysts said.
Nomura said net slippages as a percentage of opening loans at 1.9 per cent was encouraging given the ratio was north of 2.5 per cent since its listing, except in Q4FY26. Overall, delivering return on asset (ROA) of 2.5 per cent for two consecutive quarters is healthy and in line with management’s aim over the medium term, Nomura said.
"We roll forward to Jun-27F and lift our target to Rs 790 (from Rs 740), implying 2.3x Jun-28F P/B. The stock currently trades at 2.5 times 1-year forward P/B. We maintain our Neutral rating," Nomura said.
MOFSL said HDB Financial continued to witness improvement across key operating metrics, supported by strengthening asset quality, stable credit costs, and expanding margins.
"However, overall loan growth remains relatively subdued amid segment-specific challenges. While management expects growth to improve as the benefits of initiatives undertaken over the past few quarters materialize, we would await clearer and more sustained traction in loan growth before turning constructive on the stock," MOFSL said.
The brokerage retained 'Neutral' on the stock with a target of Rs 810.