Emkay Global Financial has recommended buying HDFC Bank with a target price of Rs 2,000. The bank has outperformed its peers in the private sector due to better margins and asset quality, especially in relation to unsecured loans.

HDFC Bank is implementing a strategy to securitize loans, which has led to a significant reduction in its loan-to-deposit ratio (LDR) and aims to address regulatory pressures. The bank is also focusing on slowing credit growth and increasing deposit growth to achieve a pre-merger LDR of less than 90%. Additionally, plans are underway for an IPO of its non-banking financial company subsidiary, HDB Fin, which is expected to raise Rs 125 billion, including an offer for sale of Rs 100 billion.

Amidst concerns about liquidity, discussions about a potential CRR cut by the RBI could provide relief and benefit HDFC Bank's net interest margins. The bank's current valuation is 2.2 times its estimated adjusted book value for December 2026, with subsidiary valuations contributing an additional Rs 300 per share.