Shares of HDB Financial Services Ltd surged 12.39 per cent in early trade on Thursday, hitting a high of Rs 724 after the company reported a strong set of fourth quarter (Q4 FY26) earnings.

The non-banking financial company (NBFC), a subsidiary of HDFC Bank Ltd, posted a 41.38 per cent year-on-year (YoY) jump in net profit at Rs 750.6 crore for the quarter ended March 31, 2026, compared to Rs 530.9 crore in the corresponding period last year.

Revenue from operations also rose 11.24 per cent to Rs 4,745.4 crore, up from Rs 4,266.1 crore in Q4 FY25.

Alongside its earnings, the company's board approved a proposal to raise funds through the issuance of debt securities on a private placement basis. The borrowing plan totals up to Rs 32,824.72 crore, including renewal of Rs 31,974.72 crore and a fresh approval of Rs 850 crore. The proposal is subject to shareholders' approval at the upcoming Annual General Meeting (AGM).

The board also recommended a final dividend of Rs 2 per equity share (face value Rs 10) for FY26, subject to shareholder approval. This is in addition to the interim dividend of Rs 2 per share already declared.

SBI Securities noted that asset under management (AUM) growth remained subdued during the quarter due to moderate traction in enterprise lending and asset finance amid asset quality stress. However, it highlighted that margin expansion was supported by stable asset yields and a decline in borrowing costs, aided by efficient treasury management.

The brokerage added that asset quality has stabilised across segments, supported by improved recoveries and lower forward flows during a seasonally strong quarter.

"We believe the focus would now shift towards the growth momentum for HDBFS. Supply chain normalisation and swift resolution to the West-Asia conflict would be key monitorable going ahead. At CMP of Rs 644, the stock is trading at a P/B multiple of 2.3 times/2 times for FY27/FY28, respectively, based on Bloomberg consensus estimates. The fair value of the company is estimated to be in the range of Rs 710-720," it said.

Motilal Oswal Financial Services Ltd (MOFSL) has maintained a 'Neutral' with a target price of Rs 720, premised on 2.2 times March 2028 BVPS.

From a technical perspective, Jigar S Patel, Senior Manager – Technical Research at Anand Rathi, said, "For HDB Financial, support is seen at Rs 680, while resistance is placed at Rs 724. A decisive move above Rs 724 could push the stock towards Rs 736, with the expected short-term trading range pegged between Rs 680 and Rs 736."

According to AR Ramachandran, a Sebi-registered research analyst at Tips2trades, "The stock price is bearish on daily charts with strong resistance at Rs 726. A daily close below the support of Rs 674 could trigger a drop towards Rs 627 in the near term."