HDFC Bank shares hit 52-week low, down 28% YTD; experts see further downside

Shares of HDFC Bank Ltd slipped 2.35 per cent on Thursday to hit a 52-week low of Rs 710. The stock eventually settled 2.08 per cent lower at Rs 712 on BSE.

At this closing level, the stock has declined 28.14 per cent year-to-date (YTD) and 26.83 per cent over the past one year. The stock has also delivered negative returns across longer timeframes, falling 13.01 per cent in two years, 8.83 per cent in three years and 8.05 per cent in five years.

Some market experts see further downside in the counter and believe the stock could remain under pressure or consolidate in the near term. However, one of them has advised long-term investors to consider buying HDFC Bank shares on declines.

Mayuresh Joshi, Head of Equity Research at William O'Neil India, said, "HDFC Bank has done nothing over the last five years. Therefore, I think there is a part of the market that believes there might be some excessive lending, specifically when it comes to unsecured lending, where asset quality pressures might start building up over the next few quarters. The lack of growth prospects that the Street believed in, and what the bank is delivering, is clearly creating a mismatch."

Gaurav Sharma, VP and Head of Research at Globe Capital, said issues continue to pile up for India's largest private sector bank. "We are not recommending averaging or even fresh buying of HDFC Bank to our clients," he stated.

Sharma believes HDFC Bank's stock could fall further to Rs 675-680 in the coming weeks or month.

Aditya Agarwal, Head of Investment at Coherent Wealth, said, "The stock is looking quite weak, and I'm not expecting a big upmove. We may see some time-wise correction. On the lower side, Rs 680-675 will be the support zone. On the higher side, Rs 780-785 will be the resistance zone. We will see a consolidation in HDFC Bank before a fresh upmove starts."

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted, "The stock would continue to reel under pressure over the medium- to short-term. With that being said, those with a long-term view can consider buying the counter on dips."