HDFC Bank share price witnessed a strong bull run on July 21, reclaiming the Rs 2,000 mark after seven sessions, owing to its stable Q1 results. Not just that, on the NYSE, HDFC Bank's American depositary receipt (ADR) skyrocketed by approximately 4%. Investors are in for a double treat in HDFC as the bank announced its first-ever bonus issue and Rs 5 dividend rewards. Experts are recommending buying HDFC ahead of these incentives.
HDFC Bank ADR:
At the time of writing, on the NYSE, HDFC Bank's ADR traded at $78.30, up by 3.9%. In the opening bell, the ADR even touched a new 52-week high of $78.33 apiece. Overall, the ADR is up by more than 4%.
HDFC Bank Share Price:
On BSE, after market hours, HDFC Bank closed above its pivotal mark of Rs 2,000. The share price finished at Rs 2000.20 apiece, up by 2.2%, which is near its intraday high of Rs 2002.30 apiece. The stock is now nearing its 52-week high of Rs 2,027.40 apiece.
Currently, HDFC Bank's market cap is at Rs 15,33,736.09 crore. As of now, the bank's return on equity (ROE) stood at 14.39%.
The stellar performance comes after HDFC Bank posted a stable quarter due to core PAT. HDFC is also confident in achieving its guided loan growth target, as it is optimistic about the festive season and robust domestic demand.
"HDFCB has been consistently performing on its guidance in its endeavour to revert to its pre-merger levels across metrics, and its execution capabilities remain strong," said analysts at Axis Securities in their note.
During Q1FY26, the bank's net profit was Rs 181.6 billion, a growth of 12.2% over the same quarter a year ago. Its net interest income (NII), which is the difference between interest expended and earned, surged by 5.4% YoY to Rs 314.4 billion. Core net interest margin stood at 3.35%, contracting from 3.46% in Q4FY25.
Gross advances of HDFC Bank stood at Rs 26,532 billion as of June 30, 2025, an increase of 6.7% over June 30, 2024. While the bank's average deposits were Rs 26,576 billion for the June 2025 quarter, a growth of 16.4% YoY.
Apart from steady earnings, HDFC Bank also made headlines for its 1:1 bonus issue and Rs 5 special dividend payout for FY26. Before these major rewards, experts suggest to take positions in HDFC Bank.
BUY HDFC Bank Share Price:
With the LDR below 100% and the trajectory in line with the bank's intent to bring it down to pre-merger levels over the medium term, analysts at Axis Securities expects credit growth to pick up in FY26 and mirror systemic credit growth. The bank will continue to flex its distribution strength and RM outreach to maintain strong deposit growth.
Further, the analysts added, "We believe the pressure on NIMs in the rate cut cycle would be visible for another quarter and is likely to bottom out in Q2. HDFCB's earnings growth is likely to be driven by (a) improving cost ratios driven by better productivity and efficiency, (b) controlled Credit costs on the back of strong asset quality and (c) Gradual improvement in NIMs with deposit repricing playing out from H2FY26E onwards. We expect the bank to deliver RoA/RoE at 1.7-1.9%/13-15% over the medium term. We expect HDFCB to deliver a 14/17/13/14% CAGR Credit/Deposit/Earnings growth over FY25-28E."
On the valuation, Axis Securities analysts said, "We value the core book at 2.6x FY27E ABV vs. its current valuation of 2.5x FY27E ABV (the core book trades at 2.2x FY27E ABV) and assign a value of Rs 259/share to subsidiaries, thereby arriving at a target price of Rs 2,300/share, implying an upside of 18% from the CMP. We maintain our BUY recommendation on the stock."
Also, Gaurav Jani, Research Analyst at PL Capital said, "As LDR has declined to 95% from 103.5% a year ago, focus is back on shoring up loan growth/CASA. Targeted medium term LDR is 87-90%. Bank is confident of achieving guided loan growth given strong domestic demand and upcoming festive season. For FY26/27E, we are factoring loan growth of 11%/12% YoY with an LDR of 92%/90%. PSLC cost remains a key monitorable. We maintain multiple of 2.4x on core FY27ABV but raise SOTP based TP to Rs2,150 from Rs2,125 due to increase in valuation of subsidiaries. Retain 'BUY'."
HDFC Bank Bonus Issue:
The largest bank has declared its first ever bonus issue of 1:1 i.e. 1 (One) equity share of Re. 1/- each for every 1 (One) fully paid-up equity share of Re. 1/- each held by the Members of the Bank as on the Record Date (mentioned below), subject to statutory and regulatory approvals.
In total, the bank is looking to allot 766,79,13,646 equity shares as bonus, amounting to Rs. 766,79,13,646/-.
The bank plans to complete its bonus issue action within 2 (two) months from the date of approval by the Board of Directors i.e., on or before September 18, 2025.
HDFC Bank Special Dividend:
The lender has declared a special interim dividend of Rs. 5 per equity share of Re. 1/- each fully paid up (i.e. 500%), for the FY 2025-26. The record date for determining the eligibility of Members entitled to receive the said Special Interim Dividend is Friday, July 25, 2025. The Special Interim Divided shall be paid to the eligible Members on Monday, August 11, 2025.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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