Jefferies gives a "Buy" rating for HDFC Bank with a ₹1,240 price target
The target implies a significant 63.9% upside from the recent ₹756.20 closing price
HDFC Bank stock declined 24% year-to-date amid geopolitical tensions and leadership exits
Global investment banking firm Jefferies has given a “Buy” rating to HDFC Bank, maintaining a price target of ₹1,240 in a report released on Sunday. The report described the bank’s current valuation as attractive following the recent correction and retained it among its top sectoral picks.
The target price implies a potential upside of 63.9% from the stock’s previous closing level of ₹756.20 and 69.7% from its intraday low of ₹730.50 recorded on March 30.
2 March 2026
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According to Jefferies, HDFC Bank’s stock has declined about 24% year-to-date, underperforming its peers due to concerns surrounding the exit of its chairman and the potential impact of geopolitical tensions in West Asia.
The brokerage noted that the bank is currently valued at around 1.6 times its FY27 estimated adjusted price-to-book value and 13 times price-to-earnings, representing a discount to investment banks and only a modest premium to peers.
Despite these pressures, Jefferies believes the valuation remains compelling given the bank’s strong asset quality, steady growth outlook, and healthy return on equity. It added that the bank’s sensitivity to higher credit costs and slower top-line growth appears manageable.
Greater clarity on board-level issues, including leadership appointments and CEO term renewal, could act as a catalyst for a re-rating of the stock.
HDFC CEO Exit
The bank has recently been in the spotlight following the resignation of its chairman, Atanu Chakraborty, who stepped down citing ethical concerns.
In his resignation letter dated March 17, he stated that certain developments and practices within the bank over the past two years were not aligned with his personal values.
His exit marked the first instance of a part-time chairman leaving mid-term, raising concerns about the bank’s governance.
Following the development, the company’s market capitalisation declined by ₹65,176.48 crore to ₹12,31,666.45 crore, making it one of the worst-performing stocks on benchmark indices such as the BSE Sensex and NSE Nifty, both of which also traded sharply lower during the period.
HDFC Financial Performance
On the financial front, HDFC Bank reported a standalone profit after tax of ₹18,654 crore for the third quarter of FY26, registering an 11.5% increase compared to ₹16,736 crore in the same quarter of the previous year.
The bank’s standalone revenue rose 8.9% year-on-year to ₹45,870 crore from ₹42,110 crore. Net interest income grew by 6.4% to ₹32,620 crore, compared to ₹30,650 crore in the corresponding quarter last year. The core net interest margin stood at 3.35% on total assets and 3.51% on interest-earning assets.
Operating expenses for the quarter were reported at ₹18,770 crore. However, excluding an estimated ₹800 crore impact related to employee benefits under the new labour codes, operating expenses stood at ₹17,970 crore, up from ₹17,110 crore in the year-ago period.
