HDFC Bank's stocks jump over 2% today: What's fueling rally?
What's the story
HDFC Bank's shares jumped over 2% in early trade today, following the bank's first-quarter results and the announcement of a special interim dividend and bonus issue. The bank's net revenue for the quarter ending June 30 stood at ₹53,170 crore, a 31% increase from last year's ₹40,510 crore. This growth was partly aided by transaction gains of ₹9,130 crore from an offer for sale during the IPO of its subsidiary HDB Financial Services.
Market response
Net profit for Q1 FY26 was around ₹18,160cr
Analysts at Motilal Oswal Financial Services characterized the quarter as steady, with growth expected to gain momentum. Jefferies India Pvt Ltd noted that HDFC Bank's net profit for Q1 FY26 was around ₹18,160 crore, a 12% year-on-year increase and above estimates. They highlighted better loan growth, healthy deposit growth, a relatively lower fall in net interest margin (NIM), and stable asset quality as key positives of the bank's performance.
Projections
Jefferies India maintains 'Buy' call
Despite slightly lowering their estimates for FY26-27 due to recent repo rate and deposit rate cuts, Jefferies India Pvt Ltd still expects a higher margin compression in Q2 and improvement thereafter. They have maintained their 'Buy' call with a revised target price of ₹2,400 (from ₹2,340 earlier). Meanwhile, Motilal Oswal Financial Services anticipates the NIM will contract further in Q2 due to the impact of rate cuts.
Shareholder benefits
A look at the interim dividend, bonus issue
HDFC Bank has announced a special interim dividend of ₹5 per equity share for FY 2025-26. The record date for the same is July 25, 2025. The bank also announced a bonus issue in the ratio of 1:1, implying one equity share of ₹1 will be issued for every fully paid-up equity share of ₹1 held by bank members as on the record date August 27, 2025.