HDFC Bank shares hit 52-week-high: Should you buy or hold?
What's the story
HDFC Bank's shares hit a 52-week high today, gaining over 1% in early trade. The rise comes after the bank announced its second-quarter results for FY26. On the Bombay Stock Exchange (BSE), HDFC Bank shares surged as much as 1.74% to ₹1,020 apiece, marking a new peak for the year.
Financial growth
HDFC Bank's Q2 FY26 net profit rises by 10.8%
In the second quarter of FY26, HDFC Bank reported a standalone net profit of ₹18,641.28 crore. This marks a 10.8% increase from the net profit of ₹16,820.97 crore recorded in the same quarter last fiscal year. The bank's Net Interest Income (NII) for Q2 FY26 also saw a year-on-year (YoY) growth of 4.8%, rising to ₹31,551.5 crore from ₹30,114 crore in the previous year period.
Stability indicators
Asset quality improves with gross NPA falling
HDFC Bank's asset quality improved in Q2, with gross NPA falling 7.42% quarter-on-quarter (QoQ) to ₹34,289.48 crore and net NPA declining 6.75% QoQ to ₹11,447.29 crore. The bank's gross NPA ratio fell by 16 basis points QoQ to 1.24%, while its net NPA ratio dropped by five basis points QoQ to 0.42%. This indicates a stable financial position for the bank amid changing market conditions.
Market outlook
Analysts bullish on HDFC Bank's future performance
Despite a slight contraction in margins, analysts are optimistic about HDFC Bank's future performance. Anand Dama from Emkay Global Financial Services Ltd said, "With systemic liquidity (after the recent CRR cut) and retail/SME growth impulses improving, we believe HDFC Bank is well set to outpace system growth and some peers in FY27E." He maintained a 'Buy' rating on the stock and increased its target price by around 7% to ₹1,225 per share.
Target adjustment
Nuvama Institutional Equities raises target price for shares
Nuvama Institutional Equities also maintained a 'Buy' call on HDFC Bank shares after the Q2 results. The firm raised its target price for the stock to ₹1,170 per share from an earlier ₹1,135. "HDFC Bank has already scaled up growth to system level and we expect NIM to improve Q3 FY26 onward," said Nuvama, highlighting the bank's strong performance and potential for future growth.