HDFC Bank’s share price started the day in the green after a global brokerage firm maintained its positive outlook on the banking behemoth.

What Happened: Bernstein maintained its “outperform” rating for HDFC Bank with a target price of ₹2100. The target indicates an around 25% upside from the stock’s last closing price of ₹1,671.1. The brokerage firm projects an improvement in Return on Assets (RoA) from 1.8% to 2.1% over the next four years.

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Key factors driving the brokerage’s optimism include an expected enhancement in the loan mix, normalisation of the cost of funds, and the realisation of operating leverage. The analysts anticipate that HDFC is well-positioned to regain its industry-leading profitability within this period.

The firm expects loan yields to improve by approximately 40-50 basis points and the cost of funds to decrease by 18 basis points. These improvements are seen as crucial to bolstering HDFC's financial performance and sustaining its competitive edge in the market.

Price Action: HDFC Bank’s share price was up 0.94% to trade at ₹1,688.94 as the markets opened on Tuesday.

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