This HDFC Group stock down 30% in 6 months; analysts see up to 40% upside potential

HDFC Group stocks are known to make wealth over the long-term. However, HDB Financial Services Ltd, the NBFC arm of HBFC Group, which was listed in June 2025, failed to do so. The stock is not just down 27 per cent from its all-time high but also down from its IPO price. Even after this, analysts are expecting a strong upside in the stock.

To recall, shares of HDB Financial Services were listed fag-end of June 2025, when the company raised a total of Rs 12,500 crore via IPO by selling its shares of Rs 740 apiece, with a lot size of 20 equity shares. The issue was entirely an offer-for-sale (OFS) from its parent HDFC Bank Ltd.

Shares of HDB Financial Services hit their 52-week low at Rs 642.05 on Monday, March 09, 2025. However, the stock was trading sub-Rs 650 levels on Tuesday, commanding a total market capitalization of Rs 54,000 crore. The stock is down 30 per cent from its peak at Rs 891.65 hit in July 2025, while it is down 12-13 per cent from its IPO price of Rs 740.

Management targets a 16-18 per cent growth rate for the portfolio moving forward. While disbursements recovered in Q3 to exceed Rs 17,000 crore, the current year’s book growth is expected to land between 12 and 13 per cent, said Nirmal Bang Institutional Equities. Achieving the higher forward target depends on stable GDP growth and a ramp up in high-velocity segments like consumer lending and LAP, it said.

HDB is recalibrating its portfolio mix. The management had restricted unsecured lending to address asset quality challenges; these issues are now resolved. The company aims to return to its historical balance over the next two years. The target for secured mix is 70-72 per cent. Product growth priority is more skewed towards consumer lending, LAP and gold loans, used asset financing, and unsecured enterprise lending to attract a high yield," Nirmal Bang added with a 'buy' rating and a target price of Rs 880.

Incorporated in 2007, HDB Financial Services is a retail-focused (NBFC) offering business process outsourcing (BPO) services such as back-office support services, collection and sales support services to our Promoter as well as fee-based products such as distribution of insurance products primarily to the lending customers.

HDB Financial Services is a blue-chip heritage paired with a formidable low-cost borrowing moat. The combination bestows an inherent advantage upon the company to command sustainable, scalable and high-margin growth. HDB Financial has been strategically firming up an asset franchise stronghold in India’s underserved hinterlands, said ICICI Securities, initiating coverage.

Separately, despite macroeconomic headwinds, it delivered a 20 per cent AUM CAGR, bolstering its leading NBFC status. A 2 per cent credit cost average is testament to its cycle-tested underwriting and risk-management protocols. Its focus on direct customer sourcing - accounts for 80 per cent of FY25 disbursements – facilitates customer quality and operational efficiency, it said with a 'buy' and a target price of Rs 900.