HDFC Bank Share Price Target at Rs 785: Axis Securities

Keshav Seth 6 October 2026

Axis Securities has issued a BUY call on HDFC Bank in its Axis PUNCH series, setting a three-to-six-month target of Rs 785 against a current price of Rs 715 — about 10 percent of upside. The tactical case rests on a cleared overhang: the Reserve Bank of India has approved Anup Bagchi as managing director and chief executive from Oct. 27, removing uncertainty over leadership succession at India's second-largest bank. With that resolved, attention turns to an improving operating story — credit growth at a nine-quarter high, a margin tailwind building as the rate cycle turns, and a steady climb in return on assets — even as near-term margin and deposit-mix pressures persist.

BUY
Axis PUNCH · 3-6 months
HDFC Bank · BFSI
Target Rs 785 · +10%

Overhang cleared, the focus turns to execution

Near-term pressure

CASA ratio has slid to ~31.6% from ~38% at the merger, and margins face an inevitable near-term squeeze.

Momentum building

Credit growth of ~5% QoQ in Q2 — the best in nine quarters — with the mix tilting toward retail.

The levels	Reading
Rating	BUY
Current price	Rs 715
Target price	Rs 785
Implied upside	~10 percent (3-6 months)
52-week range	Rs 1,021 / Rs 682
Market capitalisation	Rs 11.09 lakh crore (1,540 crore shares)
Valuation	1.8x FY27E adjusted book

Balance sheet

Rs 43 lakh cr

post-merger; India's No. 2 bank

Distribution

9,600+

branches, plus 20,000+ ATMs

Retail mix

52% → 60%

medium-term target, from Jun-26

Return on assets

1.8 → 1.9%

expected over FY27-29E

A succession settled

The immediate trigger is governance clarity. The RBI has cleared Anup Bagchi, a three-decade veteran of banking, insurance and capital markets, as managing director and chief executive for a full three-year term from Oct. 27. For a franchise of HDFC Bank's systemic weight, the removal of succession uncertainty is itself a re-rating catalyst, allowing management and the market to refocus on the operating agenda: reviving retail growth, lifting margins and rebuilding the low-cost deposit franchise.

Growth and margins, turning

The Q2 provisional update showed credit growth of about 5 percent sequentially — the strongest in nine quarters — with management guiding the retail share of the book toward 60 percent over the medium term. On margins, a higher weighting of loans linked to external benchmarks positions the bank to benefit as the rate cycle reverses, while a falling reliance on costly borrowings adds a structural tailwind, even if the second quarter still bears near-term pressure.

Borrowings as a share of assets — the structural easing

21%

Sep-24

~10.5%

Jun-26

Borrowings have been halved as a proportion of the balance sheet in under two years, lowering the cost of funds and supporting margins as deposits take their place.

A TopNews rendering of figures disclosed in the note.

The deposit rebuild

The clearest work-in-progress is the low-cost deposit, or CASA, ratio, which has fallen well below pre-merger levels. Management aspires to restore it to 38-40 percent over the medium term, though it cautions that the recovery will be gradual rather than sharp.

CASA ratio: the round trip management is targeting

~38% (merger)
~31.6% (now)

aspiration: 38-40% ▶

The red marker is today's ratio; the green band is the medium-term aspiration — a return to where the franchise began.

The estimates underneath

Standalone (Rs crore)	FY26	FY27E	FY28E	FY29E
Net interest income	1,28,700	1,43,700	1,66,300	1,91,900
Pre-provision profit	1,18,600	1,22,600	1,44,900	1,70,400
Net profit	74,700	81,800	95,700	1,12,800
EPS (Rs)	48.5	53.2	62.1	73.3
Adjusted book value (Rs)	358.4	398.7	445.8	501.2
P/ABV (x)	2.0	1.8	1.6	1.4
RoA (%)	1.8	1.8	1.8	1.9
Net NPA (%)	0.4	0.4	0.4	0.4

The target for investors

On Axis's numbers the stock trades near the lower reaches of its yearly band, with the Rs 785 target sitting about a third of the way up the range — a reminder that, for all its scale, HDFC Bank has lagged.

Where the price sits in its 52-week range

CMP 715
TP 785

Low Rs 682High Rs 1,021

The investment logic is straightforward: a systemically dominant franchise, pristine asset quality with net bad loans at just 0.4 percent, and return on assets climbing toward 1.9 percent as operating efficiency, benign credit costs and an eventual margin recovery compound. Net profit is modelled to grow from Rs 74,700 crore in FY26 to Rs 1,12,800 crore by FY29. With the leadership question settled and the stock near its lows, Axis Securities rates it a BUY with a Rs 785 target and about 10 percent of near-term upside; for longer-horizon investors, accumulation on dips suits a compounder of this quality.

Key risks (as flagged by the house)

Slower deposit replacement. If low-cost deposits are slow to replace high-cost borrowings, the funding-cost benefit and CASA rebuild could take longer than hoped.

Continued margin pressure. Net interest margins may stay subdued through the near term, and a delayed or shallow rate-cycle reversal would push out the recovery.

Sources & disclosures

Based on the HDFC Bank Axis PUNCH note published by Axis Securities, dated Oct. 5, 2026, authored by Dnyanada Vaidya and Abhishek Pandya. Rating, target and estimates are the brokerage's own; figures reported in higher denominations have been restated in rupee crore and lakh crore.

The borrowings-mix bars, the CASA round-trip track and the 52-week-range marker are TopNews visualisations of figures disclosed in the note; no numbers have been altered.

Investments in the securities market are subject to market risks. This research report is not investment advice; read all related documents carefully before investing.

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