HDFC Bank shares: JM Financial cuts target price to Rs 800, maintains 'ADD'
The brokerage said asset quality improved across retail and services, while agriculture emerged as a key stress pocket.
- Aug 25, 2026,
- Updated Aug 25, 2026 12:36 PM IST
JM Financial has maintained its 'ADD' rating on HDFC Bank Ltd but cut its target price to Rs 800 from Rs 900, after analysing the private lender's FY26 annual report, Basel-III disclosures and other regulatory filings.
The brokerage said asset quality improved across retail and services, while agriculture emerged as a key stress pocket. The rising share of D1/D3 assets remains monitorable ahead of the implementation of the expected credit loss (ECL) framework, it added.
JM Financial said balance-sheet risk trends remained mixed. Reduced borrower and NPA concentration, along with a rising share of better-rated corporates, were key positives. However, the increasing share of commercial real estate (CRE) and capital market loans and a sharp rise in contingent liabilities were highlighted as key negatives.
"Liabilities remain key focus area with falling retail deposit share, higher reliance on wholesale funding and a moderation in LCR," the brokerage said.
On the positive side, legacy e-HDFC borrowings continued to decline, while the bank gained 33 basis points (bps) in overall deposit market share. RIDF exposure also reduced further, while overall priority sector lending (PSL) compliance remained healthy. However, JM Financial noted that the bank continued to depend on PLSC for SMF obligations.
The brokerage said the share of interest-bearing liabilities (IBL) in the less-than-one-year bucket moved marginally year-on-year (YoY) in FY26, with the share of IBL in this bucket surpassing interest-earning assets (IEA). This could exert pressure on net interest margins (NIMs) in a rising-rate cycle, it said.
JM Financial now values HDFC Bank's core banking business at 1.5 times FY28 estimated core book value per share, compared with its earlier multiple of 1.7 times.
Meanwhile, Aditya Agarwal, Head of Investment at Coherent Wealth, said the stock looked weak and could undergo a period of consolidation.
"The stock is looking quite weak, and I'm not expecting a big upmove. We may see some time-wise correction. On the lower side, Rs 680-675 will be the support zone. On the higher side, Rs 780-785 will be the resistance zone. We will see a consolidation in HDFC Bank before a fresh upmove starts," Agarwal told Business Today.
JM Financial has maintained its 'ADD' rating on HDFC Bank Ltd but cut its target price to Rs 800 from Rs 900, after analysing the private lender's FY26 annual report, Basel-III disclosures and other regulatory filings.
The brokerage said asset quality improved across retail and services, while agriculture emerged as a key stress pocket. The rising share of D1/D3 assets remains monitorable ahead of the implementation of the expected credit loss (ECL) framework, it added.
JM Financial said balance-sheet risk trends remained mixed. Reduced borrower and NPA concentration, along with a rising share of better-rated corporates, were key positives. However, the increasing share of commercial real estate (CRE) and capital market loans and a sharp rise in contingent liabilities were highlighted as key negatives.
"Liabilities remain key focus area with falling retail deposit share, higher reliance on wholesale funding and a moderation in LCR," the brokerage said.
On the positive side, legacy e-HDFC borrowings continued to decline, while the bank gained 33 basis points (bps) in overall deposit market share. RIDF exposure also reduced further, while overall priority sector lending (PSL) compliance remained healthy. However, JM Financial noted that the bank continued to depend on PLSC for SMF obligations.
The brokerage said the share of interest-bearing liabilities (IBL) in the less-than-one-year bucket moved marginally year-on-year (YoY) in FY26, with the share of IBL in this bucket surpassing interest-earning assets (IEA). This could exert pressure on net interest margins (NIMs) in a rising-rate cycle, it said.
JM Financial now values HDFC Bank's core banking business at 1.5 times FY28 estimated core book value per share, compared with its earlier multiple of 1.7 times.
Meanwhile, Aditya Agarwal, Head of Investment at Coherent Wealth, said the stock looked weak and could undergo a period of consolidation.
"The stock is looking quite weak, and I'm not expecting a big upmove. We may see some time-wise correction. On the lower side, Rs 680-675 will be the support zone. On the higher side, Rs 780-785 will be the resistance zone. We will see a consolidation in HDFC Bank before a fresh upmove starts," Agarwal told Business Today.