HDFC Bank reported a steady set of numbers for the fourth quarter of FY26, with standalone net profit rising 9.1% year-on-year to ₹19,221 crore. The growth was supported by a strong 12.8% increase in average deposits and a 12% rise in advances, indicating continued momentum in core banking operations despite a challenging macro environment.

Asset quality remained robust, with the bank reporting a low gross NPA ratio of 0.38%, reflecting disciplined underwriting and stable credit performance. The bank also announced a final dividend of ₹13 per share for FY26, with June 19, 2026 set as the record date.

Operationally, the quarter reflected a mix of strengths and mild pressures. While loan growth remained steady at around 12% YoY, deposit growth outpaced advances, leading to an improvement in the loan-to-deposit ratio (LDR), which declined sequentially by approximately 400 basis points to around 94.6–95%. This indicates a gradual normalization of balance sheet dynamics post-merger adjustments.

Margins showed resilience despite rising funding costs, particularly due to elevated wholesale deposit rates following geopolitical tensions in the Gulf region. Sequential margin expansion of around 3 basis points was seen, which is considered a positive outcome in the current environment. However, net interest income (NII) growth remained somewhat volatile and softer than expectations for some brokerages, growing around 3.2% YoY in Q4.

A key highlight of the quarter was the sharp decline in credit costs and provisions, which supported profitability. Lower provisioning, combined with operating efficiencies and treasury gains, helped offset weaker-than-expected core revenue growth in some areas like NII and fee income.

Brokerages largely maintained a positive stance on the stock, highlighting earnings resilience, improving deposit momentum, and strong asset quality.

UBS maintained a Buy rating with a target price of ₹1175, noting that the profit beat was driven by lower provisions. The brokerage highlighted steady loan growth and expects momentum to sustain, projecting return on equity (ROE) of around 14–15% in FY27–28.

Morgan Stanley retained an Overweight rating with a target price of ₹1025. It noted that profit exceeded its estimates by 4%, driven by lower costs and provisions, despite slightly weaker core revenue. The brokerage emphasized that loan growth remains the key focus and sees the stock as an attractive pick amid geopolitical uncertainties.

CLSA maintained an Outperform rating with a target price of ₹1200, describing the quarter as steady in a challenging environment. It highlighted stable loan growth, improving deposit trends, and declining slippages over the past three quarters.

JPMorgan also maintained an Overweight rating with a target price of ₹990. While it pointed out softer NII and margin performance due to competitive pressures, it expects growth to pick up in FY27–28 supported by improving credit demand and lower funding costs.

Bernstein retained an Outperform rating with a target price of ₹1150, noting that while there was no dramatic improvement, the overall performance was stable. It highlighted strong cost discipline, declining credit costs, and steady profitability with return on assets (RoA) at around 1.9%.

Jefferies maintained a Buy rating with a target price of ₹1050. It noted that while topline performance was slightly below expectations, it was compensated by lower credit costs and operating synergies. The brokerage expects a 15% CAGR in profit before tax over the medium term.

Nomura maintained a Buy rating with a target price of ₹950, emphasizing strong asset quality and deposit growth in a tight liquidity environment. It also flagged leadership continuity as a key monitorable, with the CEO’s tenure up for renewal in October 2026.

Investec maintained a Buy rating with a target price of ₹915, calling it a soft operational quarter with subdued core performance. However, it highlighted steady profitability supported by lower credit costs and stable return ratios.

Overall, the quarter reflects a transition phase for HDFC Bank, where balance sheet adjustments continue while maintaining stable profitability. Strong deposit traction, improving asset quality, and disciplined cost management remain key positives. Going forward, investors will closely monitor margin trajectory, NII growth recovery, and leadership developments, which could act as key catalysts for the stock.