HSBC has updated its outlook on HDFC Bank, increasing the price target from INR 1,750 to INR 1,850 while maintaining a Buy rating. The adjustment comes after revisions to earnings per share (EPS) estimates and growth forecasts.
HSBC slightly decreased its EPS estimate for fiscal year 2025 by 0.7% and increased estimates for fiscal years 2026 and 2027 by 0.7% and 0.4%, respectively. The bank’s deposit growth estimate has been reduced to a compound annual growth rate (CAGR) of 17% from the earlier projection of 18% for the period from the fiscal year 2024 to 2027. Similarly, the loan growth forecast has been adjusted to a 13% CAGR down from the previous estimate of 14%.
Despite these adjustments, HSBC expects HDFC Bank’s net interest margin (NIM) to stabilize at 3.44% for the fiscal year 2025 and increase modestly over the period from the fiscal year 2025 to 2027. The increase in the price target is also supported by a raised target multiple for HDFC Bank’s banking business.
HSBC’s revised estimates and maintained Buy rating are likely to influence HDFC Bank’s stock performance and investor sentiment.
