HDFC Bank Q2 loans up 15%: Emkay sees 70% upside as Anup Bagchi takes charge

It has been an eventful weekend for HDFC Bank. A new CEO was appointed bringing an end to weeks of uncertainty and the Q2 business update is out too.

The private sector lender has remained in focus in recent months amid developments around its top management and business performance. Now, its latest business update has brought loan and deposit growth back into focus.

According to the brokerage report by Emkay Global Financial Services, the brokerage has retained its ‘Buy’ rating on HDFC Bank with a target price of Rs 1,225. This translates into an upside potential of around 70% from the current market price.

Let’s take a look at the various developments that investors need to watch –

HDFC Bank reported growth across both advances and deposits in the September 2026 quarter.

Its average advances under management rose 14% year-on-year to Rs 3,18,720 crore from Rs 2,79,460 crore in the year-ago period.

Period-end advances under management stood at around Rs 3,30,750 crore, up 15.3% from Rs 2,86,880 crore a year earlier. Gross advances also increased 16.3% to around Rs 3,21,950 crore.

Deposits recorded a faster pace of growth. Average deposits rose 16.8% year-on-year to Rs 3,16,650 crore. Within this, average current account savings account (CASA) deposits increased 10.7% to Rs 97,120 crore, while average time deposits rose 19.7% to Rs 2,19,520 crore.

At the end of September 2026, total deposits stood at around Rs 3,32,750 crore, up 18.8% year-on-year.

Furthermore, the period-end CASA deposits increased 10.8% to Rs 1,05,200 crore. Similarly, time deposits jumped 22.8% to Rs 2,27,550 crore.

The bank’s Q1 numbers provide another reference point for its business trajectory. Average advances under management stood at Rs 3,03,860 crore, while period-end advances under management were Rs 3,12,700 crore. Gross advances stood at Rs 3,06,100 crore.

On the deposit side, average deposits stood at Rs 3,01,140 crore in June. Average CASA deposits were Rs 95,700 crore, while average time deposits stood at Rs 2,05,440 crore. Period-end deposits stood at Rs 3,17,050 crore, comprising Rs 1,02,550 crore of CASA deposits and Rs 2,14,500 crore of time deposits.

On October 1, the Reserve Bank of India approved the appointment of Anup Bagchi, an ICICI Bank veteran and current Managing Director and Chief Executive Officer of ICICI Prudential Life Insurance, as HDFC Bank’s Managing Director and Chief Executive Officer for a three-year period starting October 27, 2026.

According to the Emkay report, “The approval is broadly in line with market expectations and media reports.”

Emkay believes the appointment could help address uncertainty around the bank’s management transition. “We believe the appointment should help restore investor and customer confidence in the bank,” the brokerage said.

Bagchi will also be the first chief executive from outside HDFC Bank’s organisation to lead the lender. According to Emkay, “His non-obtrusive leadership style, focus on broader strategic priorities, and aversion to micromanagement should help him carry the core team along.”

The brokerage expects management stability, deposit growth and branch productivity to remain key priorities. Technology and digital capabilities will also need attention, while processes will have to be strengthened to address issues seen in the past, including instances of mis-selling.

“Overall, we believe this appointment should remove the prolonged overhang around management succession and help restore customer and investor confidence in the bank,” Emkay said.

The brokerage believes HDFC Bank’s prolonged underperformance has brought its valuation to attractive levels. It expects progress in deposit and credit growth to support a potential re-rating.

Emkay added that a sustained re-rating could depend on the bank delivering on its business priorities, while any moderation or reversal in foreign portfolio investor outflows amid easing geopolitical uncertainty could also influence the stock.

Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.