HDB Financial Services Rated Neutral with ₹860 Target Amid Steady Growth

HDB Financial Services, India's seventh-largest diversified NBFC, holds a neutral rating with a target price of ₹860 against a current market price of ₹800.10. The firm's asset base stands at ₹1.1 lakh crore as of June 2025, supported by a 20% CAGR in AUM from FY22-FY25 and a network of 1,770 branches across 31 states.

Focusing on India's underserved middle-income segment, HDB has minimized concentration risk while expanding its franchise. Analysts project a 26% PAT CAGR through FY28, with RoA/RoE expected to reach 2.6%/16.5% as credit costs decline and operating leverage improves.

Valuations appear to reflect medium-term growth potential, leaving room for upside only upon demonstrable improvements in loan growth execution and structural enhancement of return ratios. The coverage initiation comes as the NBFC sector navigates evolving product cycles in a maturing Indian financial landscape.