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HDFC Bank shows strong loan growth and stable asset quality, supporting Motilal Oswal’s bullish outlook.
Tata Consumer is set for margin recovery and revenue growth through premium FMCG and new businesses.
Both stocks reflect brokerage firms’ confidence, with 18–19% potential upside in FY26.
Motilal Oswal, one of India’s top brokerage firms, has placed high expectations on HDFC Bank and Tata Consumer Products. Both companies are seen as strong candidates for long-term growth, with the brokerage giving a “Buy” rating and forecasting double-digit returns over the next year.
HDFC Bank has been given a target price of Rs. 2,300, while Tata Consumer Products is expected to reach Rs. 1,270 per share. To understand if these targets can be achieved, it is important to look at their latest performance, business fundamentals, and the challenges they face.
HDFC Bank has long been recognized as one of India’s most stable and profitable banks. Its performance in the first quarter of the financial year 2026 shows why Motilal Oswal continues to back it. The bank posted healthy growth in its loan book, driven by strong demand from retail, small, and medium businesses, and rural segments.
Although the net interest margin, which measures the bank’s profitability on loans, contracted slightly, the numbers were broadly in line with expectations. The fall in margins was mainly due to higher deposit costs, but analysts expect margins to recover gradually as older high-cost borrowings get replaced by new deposits at lower rates.
Another reason for confidence in HDFC Bank is its asset quality. The gross non-performing assets (GNPA) ratio stood around 1.4 percent, and the net NPA was close to 0.5 percent. This shows that the bank has very few bad loans compared to its overall lending book.
It also maintains a large buffer of provisions, which means that even if some loans go bad, the bank is financially prepared to absorb the shock. This stability is critical for any bank aiming for consistent profit growth.
Looking ahead, HDFC Bank is expected to benefit from a revival in credit demand and better deposit growth. Analysts believe that the third quarter of the financial year will be a turning point for earnings as margins start improving and loan growth accelerates. If the bank maintains its strong asset quality and continues to grow in key segments like retail and SMEs, it has a strong chance of reaching the Rs. 2,300 target set by Motilal Oswal.
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Tata Consumer Products, the FMCG arm of the Tata Group, has also been rated as a “Buy” by Motilal Oswal. The company delivered a strong performance in the first quarter of FY26, with revenue rising around 10 percent year on year to Rs. 4,780 crore.
Net profit grew 15 percent to Rs. 334 crore, showing that the business is growing steadily despite cost pressures. Much of this growth came from the India-branded business, which includes products like Tata Tea, Tata Coffee, Himalayan Water, and premium packaged foods.
However, the company faced some margin pressure due to higher input costs, particularly in packaging and certain raw materials. Analysts believe this pressure is temporary. Tea prices have started to stabilize, the monsoon season has been favorable, and the company’s focus on premium and high-margin products is expected to lift profitability in the coming quarters.
The management also expects new growth segments, such as Capital Foods and Organic India, to deliver more than 30 percent year-on-year growth starting from the second quarter.
Motilal Oswal projects that Tata Consumer can achieve a compound annual growth rate of around 10 percent in revenue, 12 percent in EBITDA, and 13 percent in net profit between FY25 and FY27. These numbers suggest that the company’s long-term growth trajectory is intact. If the margin recovery takes place as expected and the premiumization strategy works, the stock could reach the Rs. 1,270 target in the coming months.
For HDFC Bank, the broader banking sector environment is favorable. Interest rates are gradually stabilizing, and demand for credit remains high across retail, housing, and small businesses. Indian banks are also in a healthier position compared to past cycles, with lower non-performing assets and better capital buffers. This gives HDFC Bank an advantage to expand without taking excessive risk.
For Tata Consumer, the FMCG market is showing signs of recovery after a period of sluggish rural demand and high raw material costs. A stable monsoon has improved rural sentiment, and urban demand for premium products is rising. With consumers shifting towards branded and healthier options, companies like Tata Consumer are well-positioned to benefit. The growth of newer businesses, combined with its strong presence in tea, coffee, and packaged foods, gives the company multiple levers to increase revenue and margins.
Despite the positive outlook, both companies face certain challenges. HDFC Bank’s immediate challenge is to manage its net interest margins. If deposit rates remain high for longer than expected, margin recovery could be delayed, which may affect near-term profitability. Another risk comes from unexpected asset quality shocks, especially in small business lending or the corporate segment, although the bank’s strong provisioning provides some comfort.
Tata Consumer, on the other hand, remains exposed to fluctuations in raw material costs and competitive pressures in the FMCG space. If input costs rise again or if rural demand does not improve as expected, margin expansion could be delayed. Additionally, the success of new growth businesses like Capital Foods and Organic India is crucial for achieving the revenue growth targets. Any delay in scaling these businesses could impact overall performance.
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Both HDFC Bank and Tata Consumer Products have strong fundamentals and are aligned with Motilal Oswal’s optimistic targets. HDFC Bank’s strength lies in its large and diversified loan book, strong asset quality, and high level of provisions. Its performance in the next few quarters will depend on how quickly margins recover and how successfully it grows its retail and SME lending.
Tata Consumer is a different story, focused on consumer goods rather than finance, but its growth drivers are clear. The company is benefiting from premiumization trends, diversification into new businesses, and a rebound in the core tea and coffee segments. As margins improve and revenue continues to grow, the stock is well-positioned to meet brokerage expectations.
HDFC Bank could see its earnings accelerate in the second half of the financial year, while Tata Consumer may witness stronger margins and revenue from its growth verticals. Together, they reflect the kind of high-quality stocks that are expected to deliver consistent returns in a gradually improving Indian economy.
