HDFC Bank stock with 21% net profit CAGR has more upside? 

Private sector lender HDFC Bank is trading near its record high reached in July end. The banking stock reached its record high of Rs 2036 on July 31, 2025. Shares of the largest private sector lender by market capitalisation will turn ex-bonus on August 26 this year. The board had cleared the bonus issue in the ratio of 1:1. 

The lender clocked a compounded annual growth rate (CAGR) of 21% in net profit in the last five years. 

However, in a worrying sign for investors, provisions for bad loans (standalone) zoomed 455% to Rs 14,440 crore in Q1 against Rs 2602 crore in the June 2024 quarter. In the March 2024 quarter, provisions stood at Rs 3,190 crore. 

During its Q1 earnings show, the bank reported a 12% rise in standalone net profit for Q1 FY26. Net profit climbed to Rs 18,155 crore in the first quarter of the current fiscal compared to Rs 16,175 crore in Q1FY25. HDFC Bank's gross NPA ratio rose to 1.40% in the June quarter compared to 1.33% in the June 2024 quarter. The net NPA ratio was 0.47% in the last quarter compared to 0.39% in the June 2024 quarter and 0.43% in the March 2025 quarter. 
 
Foreign brokerage Jefferies has set a target of Rs 2,400 on the banking stock. 

The brokerage sees the bank’s strong deposit mobilisation, better loan-to-deposit ratio (LDR) targets, and merger-related synergies as key positives.

“Ability to lower loan-to-deposit ratio (LDR) to 95% (from 104% last year) and grow deposits at healthy pace of 16% are key pillars to grow and lower LDR to 85-90% by Mar-27,” said Jefferies. 

After merger, HDFC Bank is cross-selling more products to its customers boosting revenues and lending appetite, says Jefferies 

“Improvement in growth, stable asset quality & merger synergies should support earnings growth & ROE," the global brokerage noted. 

Motilal Oswal has a price target of Rs 2,300 on the private lender.  

The bank is focussed on sustainable growth over the medium term as it continues to invest in strengthening its physical infrastructure and digital capabilities. 

In its annual report, the bank said it is focused on taking singles in FY25 with aim to reduce credit deposit (CD) ratio as per the regulatory guidance, and it is now well positioned to go for boundaries. 

"After 5% YoY growth in FY25, the bank has suggested to grow inline with the system in current fiscal and higher than the system in FY27E. We estimate HDFC Bank to deliver loan growth of 10.7%/12.5% in FY26/FY27E. We estimate HDFCB to deliver FY27E RoA/RoE of 1.9%/14.9%. Reiterate BUY with a TP of Rs 2,300 (2.6x FY27E ABV + Rs 283 for subsidiaries)," added the domestic brokerage. 

In terms of technical outlook, Jigar S Patel from Anand Rathi says, "Support will be at Rs 1,965 and resistance at Rs 2,030. A decisive move above the Rs 2,030 level may trigger a further upside of Rs 2060. The expected trading range will be between Rs 1,960 and Rs 2,060 for the short-term."

Amol Athawale, VP-technical Research, Kotak Securities said, "After a short-term correction, the stock is witnessing range-bound activity near the 20 and 50-day SMA (Simple Moving Averages). We are of the view  that the short-term technical support is placed at Rs 1,960. As long as the stock is trading above this level, the reversal formation is likely to continue. On the higher side, Rs 2,020 would be the immediate breakout level for the bulls. A successful breakout above Rs 2,020 could push the stock up to Rs 2,100. On the flip side, if the stock falls below Rs 1,960, the uptrend would become vulnerable."

Osho Krishan of Angel One said, "HDFC Bank is currently demonstrating a robust consolidation pattern around its 20-DEMA, which is situated near the Rs 2000 level. A breakout above Rs 2030 in the forthcoming weeks has the potential to reinforce bullish momentum. Conversely, the 50-day DEMA, positioned within the Rs 1970- Rs 1960 range, is anticipated to provide support in the event of any downward movements. At present, the stock is expected to oscillate within this defined range, and a decisive breakthrough in either direction could catalyse significant momentum."

Shitij Gandhi, Sr. Research Analyst - Technicals, SMC Global Securities is neutral on the banking stock. 

"HDFC Bank shares have been range-bound over the past two weeks, with price action largely confined between Rs 1,970 and Rs 2,020. The stock has turned cautious as multiple short-term moving average crossovers  signaled bearish momentum, hinting at near-term weakness.Technical indicators present a mixed picture as the RSI remains neutral around 50, while the MACD is mildly positive, suggesting a lack of strong directional bias. Immediate support is placed at Rs 1,975– Rs 1,970 zone, while resistance is seen near Rs 2,000– Rs 2,020.

A break below the support zone may drag the stock toward Rs 1,940, while a move above Rs 2,020 could trigger a short-term recovery. Until then, the outlook stays neutral with a mild bearish tilt, with broader market sentiment playing a key role in the next move," said Gandhi.

In the current session, the banking stock ended  0.11% higher at Rs 1990.20 on BSE. Market cap of the bank stood at Rs 15.27 lakh crore.