HDFC Bank Shares Surge, Then Erase Gains; CLSA Reiterates 'Outperform' with 28% Upside

• HDFC Bank shares initially rose by 1.1% to Rs 947.7 but later pared gains, trading flat at Rs 936.5.
• CLSA reiterated its 'Outperform' rating on HDFC Bank with a target price of Rs 1,200, projecting a 28% upside.
• The brokerage dismissed investor concerns regarding deposit growth and the elevated loan-to-deposit ratio (99%).
• CLSA believes expectations of immediate margin improvement post-merger were misplaced, anticipating a 'bounce-back' in FY27.
• HDFC Bank, India's largest private lender, is trading at a 10-12% price-to-book discount to ICICI Bank, offering valuation comfort.

Why It Matters: HDFC Bank shares saw early gains erased despite CLSA's 'Outperform' call, citing long-term potential.