HDFC Bank shares recover over four percent in September as experts eye long-term gains

HDFC Bank shares have gained over four percent in September after hitting a 52-week low of ₹682 on September 11. The banking stock is on track to end its two-month losing streak, even as the Sensex is set to extend its losses for a second consecutive month. On September 21, the stock rose 1.49 percent to close at ₹740, remaining the top contributor to the Sensex gain of 0.76 percent to reach 74,859. Past returns show the stock has declined 4.5 percent in the last five years, 4.7 percent in the last three years, 15 percent in the last two years, 23.5 percent in the last year, and 25.3 percent year-to-date. It peaked at a 52-week high of ₹1,020.35 on October 23 last year and currently trades 27.5 percent below that peak. Analysts attribute the past underperformance to slow normalisation of the loan-to-deposit ratio after the HDFC merger, near-term net interest margin compression, and leadership reset concerns, despite healthy asset quality and resilient profitability. Shareholding data shows the stock remains a favorite among institutional investors. By the end of the June quarter for financial year 2027, domestic institutions held a 41.92 percent stake, while foreign portfolio investors held 41.83 percent. Additionally, the Reserve Bank of India approved Life Insurance Corporation of India in August to acquire up to a 9.99 percent stake in the bank. Ajit Mishra of Religare Broking recommends buying the stock for the long term with a medium-term target band of ₹760 to ₹800. Vinit Bolinjkar of Ventura suggests accumulation with a 12 to 18-month horizon. Technical experts like Jigar S. Patel of Anand Rathi point to a bullish divergence on the weekly RSI and hammer candlesticks in the ₹680 to ₹700 zone, targeting ₹800 to ₹820 over five to six months. Vipin Kumar of Globe Capital Market notes the stock breached the ₹730 to ₹735 resistance zone and could scale toward ₹760 to ₹770.