Motilal Oswal Maintains BUY Rating on HDFC Bank with Target Price of ₹1,175

HDFC Bank has received a BUY rating from Motilal Oswal with a target price of ₹1,175 following the bank's Q3FY26 financial results. The brokerage firm's research report highlights the bank's steady performance despite facing regulatory changes and market challenges.

Q3FY26 Financial Performance

HDFC Bank reported strong quarterly results with several key metrics showing positive growth trends:

Financial Metric	Q3FY26 Performance	Growth Rate
Net Profit	₹18,654.00 crores	11% YoY (in-line)
Net Interest Income	₹32,620.00 crores	6.4% YoY (in-line)
Other Income	₹13,250.00 crores	16% YoY (in-line)
Margins on Total Assets	3.35%	+8bp QoQ

The bank's profit growth of 11% year-on-year was achieved despite facing headwinds from the implementation of new labor code regulations, demonstrating the institution's operational resilience.

Key Financial Highlights

The quarter saw notable developments in the bank's income streams and operational adjustments. Treasury operations contributed significantly to other income, with treasury gains reaching ₹930.00 crores compared to ₹70.00 crores in Q3FY25. This substantial increase in treasury performance helped offset other operational challenges.

However, the bank reported an ₹800.00 crores impact arising from the transition to the new labor code, reflecting the ongoing regulatory adjustments in the banking sector.

Provisions and Risk Management

A significant positive development was observed in the bank's provision expenses, which stood at ₹2,840.00 crores, coming in 20% lower than Motilal Oswal's estimates. This improvement was primarily driven by the bank's decision to release ₹1,040.00 crores of contingent provisions related to a large borrower group, indicating improved asset quality management.

Future Outlook and Projections

Motilal Oswal has fine-tuned its earnings estimates for HDFC Bank and projects the institution to deliver strong returns in the coming years:

Projection Metric	FY27E Target
Return on Assets (RoA)	1.9%
Return on Equity (RoE)	14.5%

The brokerage firm's target price of ₹1,175 is based on 2.5x September 2027E Adjusted Book Value plus ₹137.00 for subsidiaries, reflecting confidence in the bank's long-term growth prospects and operational efficiency improvements.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.17%	-1.81%	-6.61%	-5.96%	+11.47%	+23.37%

HDFC Bank witnessed substantial institutional trading activity on the National Stock Exchange (NSE) through a significant block trade transaction. The trade represents a notable movement in one of India's leading private sector banking stocks.

Block Trade Details

The transaction details highlight the scale of institutional investor activity in the banking sector:

Parameter:	Details
Total Trade Value:	₹46.50 crores
Number of Shares:	501,260 shares
Price Per Share:	₹927.70
Exchange:	National Stock Exchange (NSE)

Market Significance

Block trades are typically executed by institutional investors, including mutual funds, insurance companies, foreign institutional investors, and other large market participants. These transactions are conducted outside the regular market to avoid impacting the stock's market price during execution.

The price of ₹927.70 per share for this block trade provides insight into the valuation at which large investors are willing to transact in HDFC Bank shares. Such transactions often reflect institutional portfolio rebalancing, strategic investments, or divestment activities.

Trading Activity Impact

Block trades of this magnitude can serve as indicators of institutional sentiment toward the banking sector. The transaction involving over 5 lakh shares demonstrates continued institutional interest in HDFC Bank, which remains one of the most actively traded banking stocks on Indian exchanges.

The execution of this block trade through NSE's platform ensures transparency and regulatory compliance while facilitating large-volume transactions between institutional participants.