The bank recently came under the spotlight due to the resignation of its part-time Chairman, Atanu Chakraborty, who cited concerns over certain internal developments that he said were not aligned with his personal values and ethics.

This development triggered governance-related worries, putting the bank's stock under sharp selling pressure.

As of 9:30 am, the share price of HDFC Bank was down over 1 per cent, or Rs 8.30, trading at Rs 747.90. Despite this, Jefferies sees an upside of 64 per cent from the current market price, citing attractive valuations and underperforming peers (HDFC Bank Share Price)

Jefferies' take on HDFC Bank

The brokerage highlighted that HDFC Bank's stock has declined around 24 per cent year-to-date, significantly underperforming its peers. However, this correction has made valuations increasingly attractive.

According to brokerage, HDFC Bank is currently trading at approximately 1.6x price-to-book and 13x price-to-earnings, representing a discount to competitors such as ICICI Bank.

Jefferies has identified the bank as one of its top picks in the sector. Loan growth is projected at a compound annual growth rate (CAGR) of about 13 per cent between FY26 and FY28, while net profit is estimated to reach Rs 922 billion by FY28.

Margins are expected to remain stable, with net interest margins (NIM) projected at around 3.5 per cent. Return on equity (ROE) is also seen holding steady near 14 per cent. Asset quality continues to be a strong point, with gross non-performing assets (GNPA) estimated at roughly 1.2 per cent and net NPAs (NNPA) at about 0.4 per cent.

Jefferies also noted that synergies from the recent merger are likely to support growth and improve operational efficiency. Key triggers for the stock include stronger deposit growth and greater clarity on leadership.

However, Jefferies cautioned that risks remain, particularly around integration challenges, deposit mobilisation, and management transition.

Other brokerages on HDFC Bank

Jefferies is not the only firm maintaining a positive outlook for HDFC Bank. Several global and domestic brokerages have also reiterated bullish ratings:

• Bernstein: "Outperform" rating with a target price of Rs 1,150.
• Citi: "BUY" rating with a target price of Rs 1,200.
• Nirmal Bang: "BUY" rating with a target price of Rs 1,210.
• Emkay: "BUY" rating with a target price of Rs 1,225.

Also Read: HDFC Bank share price target 2026: Bernstein sees long-term outperformance for bank stock, despite sectoral headwinds

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)

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