HDFC Bank shares climb 9% in seven sessions; is the worst over for this banking stock?

Shares of HDFC Bank continued their upward move for the seventh straight session in Friday's trade. The stock rose 1.71 per cent to hit a day high of Rs 1,554. At this price, it has moved 8.91 per cent higher in seven trading sessions.

Analysts largely remained positive on the counter. "The worst is over for HDFC Bank as far as stock price action is considered. The quarterly update has been encouraging and in the correct direction. The street will now look out for the sustainability factor," Mayuresh Joshi, Head-Equity Research at William O'Neil India, told Business Today TV.

On the technical setup, immediate support on the counter could be seen at Rs 1,490.

Kiran Jani, Head of Technical Research at Jainam Broking, said, "Major support on the counter will be at the Rs 1,390-1,400 zone. Expected near-term targets will be Rs 1,560-1,570. Any dip towards Rs 1,500 could be considered as a good buy, keeping a strict stop loss at Rs 1,490. On the higher side, a decisive close above Rs 1,560 can trigger HDFC towards Rs 1,600 level."

HDFC Bank's gross loans rose sequentially in the March quarter to 25.08 lakh crore, as per BSE data. Domestic retail loans rose about 3.7 per cent sequentially, while its corporate and wholesale loans, excluding non-individual loans of the company before the merger, fell 2.2 per cent sequentially.

Deposits rose 7.5 per cent to 23.8 lakh crore sequentially. The Mumbai-based private lender's strong deposit growth and a pullback in loan growth has helped reduce LDR by 600 basis points (bps) on quarter to 105 per cent, Jefferies said. Even though LDR still remains high, the downward direction is encouraging, the brokerage added.

LDR is an important metric for banks as it helps assess their liquidity position by gauging whether it has enough deposits on its balance sheet to fund loan growth.

Separately, the bank has divested 3.03 per cent stake or 27,81,897 shares in Indraprastha Medical Corporation Ltd. It now holds 2.45 per cent in Indraprastha.