HDFC Bank shares climb 19% in 6 months; analysts weigh in ahead of Q1 results, likely bonus issue
HDFC Bank: In the lead-up to its Q1 earnings and a potential bonus issue, a few market experts believe the bank has moved past its phase of weak growth and is well-positioned to outperform the broader market in the months ahead.
- Jul 18, 2025,
- Updated Jul 18, 2025 1:29 PM IST
Shares of HDFC Bank Ltd have risen over 19 per cent in the past six months, significantly outperforming the BSE Sensex's nearly 6 per cent gain during the same period. The country's largest private sector lender is scheduled to announce its June 2025 quarter (Q1 FY26) results on Saturday.
In the lead-up to its Q1 earnings and a potential bonus issue, a few market experts believe the bank has moved past its phase of weak growth and is well-positioned to outperform the broader market in the months ahead. With interest rate cuts underway and the effects of its merger unfolding, they suggest holding the stock and consider accumulating on declines.
"We believe the worst is behind us in terms of weak credit growth and subdued year-on-year (YoY) profit performance. HDFC Bank is likely to see improved credit growth and a strong rebound in profitability. Over the next six months, we expect the stock to outperform benchmark indices like the Sensex and Nifty," said G Chokkalingam, Founder and MD of Equinomics Research.
"HDFC Bank shares had been consolidating for a while and have now crossed the Rs 2,000 mark. With the onset of a rate cut cycle, large private banks with strong balance sheets -- such as HDFC Bank -- stand to benefit. Investors are also keenly watching the yield impact of the HDFC-HDFC Bank merger. The bank is set to report its quarterly results tomorrow and may also announce a bonus issue. Existing investors should continue to hold, while new positions can be considered on dips," stated Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
HDFC Bank's board may consider its first-ever bonus share issue on July 19, alongside the announcement of its Q1 FY26 results. The board will also evaluate a proposal for a special interim dividend on the same day.
Issuing bonus shares would increase the total number of the bank’s outstanding equity shares. However, this would also lead to a reduction in the lender’s free reserves and surplus, resulting in a dilution of earnings per share (EPS) and potentially causing a drop in the stock market price.
Bonus shares are issued in a specific ratio to existing shareholders. For instance, a 2:1 bonus ratio means that for every one share held, a shareholder would receive two additional shares -- increasing their total holding to three shares. Similarly, a 3:1 ratio would result in three new shares for every one held, bringing the total to four shares.
Last checked on Friday, HDFC Bank shares were trading 0.90 per cent lower at Rs 1,968.80.
Shares of HDFC Bank Ltd have risen over 19 per cent in the past six months, significantly outperforming the BSE Sensex's nearly 6 per cent gain during the same period. The country's largest private sector lender is scheduled to announce its June 2025 quarter (Q1 FY26) results on Saturday.
In the lead-up to its Q1 earnings and a potential bonus issue, a few market experts believe the bank has moved past its phase of weak growth and is well-positioned to outperform the broader market in the months ahead. With interest rate cuts underway and the effects of its merger unfolding, they suggest holding the stock and consider accumulating on declines.
"We believe the worst is behind us in terms of weak credit growth and subdued year-on-year (YoY) profit performance. HDFC Bank is likely to see improved credit growth and a strong rebound in profitability. Over the next six months, we expect the stock to outperform benchmark indices like the Sensex and Nifty," said G Chokkalingam, Founder and MD of Equinomics Research.
"HDFC Bank shares had been consolidating for a while and have now crossed the Rs 2,000 mark. With the onset of a rate cut cycle, large private banks with strong balance sheets -- such as HDFC Bank -- stand to benefit. Investors are also keenly watching the yield impact of the HDFC-HDFC Bank merger. The bank is set to report its quarterly results tomorrow and may also announce a bonus issue. Existing investors should continue to hold, while new positions can be considered on dips," stated Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
HDFC Bank's board may consider its first-ever bonus share issue on July 19, alongside the announcement of its Q1 FY26 results. The board will also evaluate a proposal for a special interim dividend on the same day.
Issuing bonus shares would increase the total number of the bank’s outstanding equity shares. However, this would also lead to a reduction in the lender’s free reserves and surplus, resulting in a dilution of earnings per share (EPS) and potentially causing a drop in the stock market price.
Bonus shares are issued in a specific ratio to existing shareholders. For instance, a 2:1 bonus ratio means that for every one share held, a shareholder would receive two additional shares -- increasing their total holding to three shares. Similarly, a 3:1 ratio would result in three new shares for every one held, bringing the total to four shares.
Last checked on Friday, HDFC Bank shares were trading 0.90 per cent lower at Rs 1,968.80.