HDB Financial Shares: Brokerages Cut Targets Post Q3 Results; Will Stock Fall?

• HDB Financial Services reported a 36% YoY net profit increase to ₹644 crore in Q3, driven by reduced credit costs and stable asset quality.
• Credit costs decreased to 2.5%, and NIM saw a 14-15 bps QoQ increase, though future margin expansion is expected to be limited.
• Loan growth was 12.2% (down from 13% previous quarter), with AUM up 12% YoY and NII rising 22.1% to ₹2,285 crore.
• Gross Stage-3 loans remained stable at 2.81%, but concerns persist over credit costs being above normalized levels and lower-than-target disbursement growth (10% YoY vs. 18-20% CAGR target).
• Motilal Oswal maintained 'Neutral' with a ₹815 target, while MK Global downgraded to 'Reduce' with a ₹750 target, citing growth and profitability concerns.

Why It Matters: Despite profit growth, brokerages cut HDB Financial targets due to concerns over loan growth and profitability outlook.