HDFC Bank shares gain on Q2 earnings beat, can they breach record high?
HDFC Bank stock hit its all time high of Rs 1791.90 on July 3, 2024. The private sector lender reported a 5.3% year-on-year (YoY) rise in profit to Rs 16,821 crore.
- Oct 21, 2024,
- Updated Oct 21, 2024 11:05 AM IST
Shares of HDFC Bank gained nearly 4% in early deals on Monday after the lender reported Q2 earnings last week, which beat estimates. HDFC Bank shares gained 3.76% to Ra 1744.50 on BSE. The banking stock is trading neither in the oversold territory nor in the overbought zone as the relative strength index (RSI) of HDFC Bank stands at 50.3.
Market cap of HDFC Bank rose to Rs 13.29 lakh crore amid volatility in the broader market.
Total 3.29 lakh shares of the firm changed hands amounting to a turnover of Rs 57.08 crore on BSE. HDFC Bank stock has a one-year beta of 1. This signals the stock has average volatility.
The large cap stock stands higher than the 5 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
The stock hit its all time high of Rs 1791.90 on July 3, 2024. The private sector lender reported a 5.3% year-on-year (YoY) rise in profit to Rs 16,821 crore.
Net interest income (NII) climbed 10% YoY to Rs 30,113 crore.
Total deposits rose 15.1% YoY in the September quarter to Rs 25,00,100 crore. Gross advances logged a growth of 7% YoY to Rs 25,19,000 crore.
Motilal Oswal Financial Services said the lender reported steady performance in 2QFY25, with net earnings of Rs 168.2 bn (~3% beat).
"Given that the bank is focusing on bringing credit deposit ratio to a normalized level, we trim our loan growth estimates to 7%/10% for FY25/FY26. Thus, we estimate credit deposit ratio to improve to 97.1%/92.2% in FY25/FY26. We estimate HDFCB to report gradual recovery in loan growth over FY25-27E with earnings growth accelerating faster. We thus estimate HDFCB to deliver FY26E RoA/RoE of 1.8%/14.6%. We reiterate our BUY rating with a target price of Rs 2,050 (2.4x Sep’26E adjusted book value plus Rs 295 for subs)," said Motilal Oswal.
Nuvama Institutional Equities reiterated its BUY rating on the stock with a price target of Rs 1950.
"The bank shall achieve the pre-merger LDR of ~86% in three years versus four earlier. The negative of low loan growth is fully priced in while resilient credit quality and deposit share gains shall become key strengths in the current environment. We are tweaking earnings and raising target price by 6% to Rs 1950/2.3x BV FY26E; retain ‘BUY’. We reiterate ‘BUY’ given the bank’s record of strong risk assessment and early risk aversion in unsecured loans compared with peers and improving deposit share, " said Nuvama.
Shares of HDFC Bank gained nearly 4% in early deals on Monday after the lender reported Q2 earnings last week, which beat estimates. HDFC Bank shares gained 3.76% to Ra 1744.50 on BSE. The banking stock is trading neither in the oversold territory nor in the overbought zone as the relative strength index (RSI) of HDFC Bank stands at 50.3.
Market cap of HDFC Bank rose to Rs 13.29 lakh crore amid volatility in the broader market.
Total 3.29 lakh shares of the firm changed hands amounting to a turnover of Rs 57.08 crore on BSE. HDFC Bank stock has a one-year beta of 1. This signals the stock has average volatility.
The large cap stock stands higher than the 5 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
The stock hit its all time high of Rs 1791.90 on July 3, 2024. The private sector lender reported a 5.3% year-on-year (YoY) rise in profit to Rs 16,821 crore.
Net interest income (NII) climbed 10% YoY to Rs 30,113 crore.
Total deposits rose 15.1% YoY in the September quarter to Rs 25,00,100 crore. Gross advances logged a growth of 7% YoY to Rs 25,19,000 crore.
Motilal Oswal Financial Services said the lender reported steady performance in 2QFY25, with net earnings of Rs 168.2 bn (~3% beat).
"Given that the bank is focusing on bringing credit deposit ratio to a normalized level, we trim our loan growth estimates to 7%/10% for FY25/FY26. Thus, we estimate credit deposit ratio to improve to 97.1%/92.2% in FY25/FY26. We estimate HDFCB to report gradual recovery in loan growth over FY25-27E with earnings growth accelerating faster. We thus estimate HDFCB to deliver FY26E RoA/RoE of 1.8%/14.6%. We reiterate our BUY rating with a target price of Rs 2,050 (2.4x Sep’26E adjusted book value plus Rs 295 for subs)," said Motilal Oswal.
Nuvama Institutional Equities reiterated its BUY rating on the stock with a price target of Rs 1950.
"The bank shall achieve the pre-merger LDR of ~86% in three years versus four earlier. The negative of low loan growth is fully priced in while resilient credit quality and deposit share gains shall become key strengths in the current environment. We are tweaking earnings and raising target price by 6% to Rs 1950/2.3x BV FY26E; retain ‘BUY’. We reiterate ‘BUY’ given the bank’s record of strong risk assessment and early risk aversion in unsecured loans compared with peers and improving deposit share, " said Nuvama.