The bank’s net interest income (NII), a key measure of its earnings from lending, also showed a steady rise. It increased by 4.8% YoY to Rs 31,550 crore, up from Rs 30,110 crore reported in the second quarter of FY25. Meanwhile, the bank’s core net interest margin (NIM) stood at 3.27% on total assets. This was slightly lower than 3.35% in the previous quarter ended June 30, 2025, indicating that asset repricing outpaced deposit repricing during the period.
In terms of total revenue, the bank posted a 10.3% YoY growth in net revenue, reaching Rs 45,900 crore for Q2 FY26, as compared to Rs 41,600 crore in the year-ago quarter.
HDFC Bank also registered a healthy expansion in its deposit base and advances. Average deposits rose by 15.1% YoY to Rs 27.10 lakh crore for the September 2025 quarter. The bank’s low-cost deposit base, known as CASA (Current Account and Savings Account) deposits, increased by 8.5% to Rs 8.77 lakh crore, signaling continued traction in both retail and corporate banking segments.
On Friday, HDFC Bank shares closed 0.8% higher at Rs 1,002.50 on the BSE.
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After the Q2 results, here is what brokerage firms are saying:
Morgan Stanley: Overweight| Target price: Rs 1,225
Morgan Stanley has reiterated an ‘Overweight’ rating on HDFC Bank and set a target price of Rs 1,225. The brokerage expects loan growth to be aligned with the broader banking system in FY26, with market share gains likely to resume in the following periods.
According to Morgan Stanley, earnings growth is poised to accelerate, as the net interest margin (NIM) appears to have bottomed out, while asset quality continues to remain strong. The brokerage also anticipates operating leverage benefits driven by the bank’s technology initiatives. This is expected to support a core pre-provision operating profit (PPOP) compound annual growth rate (CAGR) of approximately 19% during FY26–FY28, compared to 9% projected for FY26 alone.
Elara Capital: Accumulate| Target price: Rs 1,147
After the results, Elara Capital has maintained an ‘Accumulate’ rating on HDFC Bank, with a target price set at Rs 1,147. The brokerage noted that the bank’s performance is in line with expectations, with the normalization process currently underway.
According to Elara, HDFC Bank has successfully navigated a challenging transition period, and amicable outcomes now appear likely. The brokerage also highlighted that the focus continues to be on the net interest margin (NIM) trajectory, with asset quality emerging as a key differentiator for the bank.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)