HDFC Bank shares will bounce back in FY27, CLSA says projecting 28% upside

Shares of India's largest private lender, HDFC Bank Ltd

. opened in the green in trade on Tuesday (January 13).

Brokerage firm CLSA has maintained an 'Outperform' rating on the stock, with a price target of ₹1,200, which implies a potential upside of 28% from current levels.

Since the bank's Q3 operational update, the stock has corrected 6-7%.

HDFC Bank reported 12% growth in its loan book, marking the first double-digit expansion since the merger. Deposits grew in line with advances at 11.5%.

During the quarter, the LDR increased by 50 basis points to nearly 99%, above management guidance, which had aimed to reduce it to below 90% in the near term.

According to the global brokerage firm, feedback from investors remains broadly consistent.

Deposit growth has moderated, while the loan‑to‑deposit ratio (LDR) has risen to nearly 99%.

Investors have also said that, since the merger with HDFC, margins have not shown much improvement despite refinancing wholesale bonds with deposits.

CLSA believes most concerns are either misconceived or temporary, and expects FY27 to be a 'bounce-back' year for the bank.

Following the recent correction, HDFC Bank now trades at a 10‑12% price-to-book discount to ICICI Bank. The brokerage said it is an opportune time for investors to look past the noise and buy into this well-established franchise.

The HDFC Bank stock has declined in each of the last six trading sessions, marking the first such weekly decline since September 22‑26, 2025.

Over these sessions, the stock has fallen roughly 7%, making last week its worst since January 2024, when it had dropped 10% in the week ending January 19.

Shares closed 0.28% lower on Monday at ₹936.40, with the lender's market capitalisation at ₹14.48 lakh crore. HDFC Bank is scheduled to report its Q3 results on Saturday, January 17.