Several leading brokerage firms expressed their positive views on HDFC Bank stock after the bank’s Q4 business update, highlighting better than expected deposit growth during the March quarter.
According to CNBC-TV18, Macquarie maintained an “outperform” view on the stock with a target price of ₹2,000 and said the bank’s Q4 updates show that consolidation strategy is working well. Macquarie said the decline in corporate loan growth and LDR (loan-to-deposit) are excellent results while deposit growth is a positive surprise. Macquarie believes the stock is available at attractive valuations and should be added, CNBC-TV18 reported.
HSBC maintained a buy call on the stock with a target price of ₹1,750, citing HDFC Bank’s Q4 deposit performance was above Street estimates amid slowdown in loan growth and the reduction in LDR was in line with expectations. Morgan Stanley maintained an overweight view of the stock with a target price of ₹1,900, CNBC-TV18 reported.
HDFC Bank’s share price has witnessed decent gains in the recent past after a year of weak performance. The stock fell around 10 percent in FY24 while the equity benchmark Sensex jumped around 25 percent.
Meanwhile, the bank will announce its financial results for the fourth quarter of FY24 on April 20. The private lender’s board of directors will meet on Saturday, April 20, to approve HDFC Bank’s Q4 results.
Also Read: HDFC Bank Q4 Result: Private lender to announce Q4 earnings, dividend on April 20
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HDFC Bank Q4 business update
In an exchange filing on Thursday, April 4, India’s largest private lender said its Q4FY24 gross advances rose 55.4 percent year-on-year (YoY) and 1.6 percent quarter-on-quarter (QoQ) to nearly ₹25,08,000 crores.
The bank’s domestic retail loans grew by around 108.9 percent YoY and around 3.7 percent QoQ during its commercial and rural
bank loans grew by about 24.6 percent YoY and about 4.2 percent QoQ, according to the lender’s exchange.
Its corporate and other wholesale loans (excluding non-individual loans from the erstwhile HDFC Limited) grew by around 4.1% YoY but declined by 2.2% QoQ.
Further, the deposit figure stood at ₹23,80,000 crore as on March 31, 2024, registering a growth of around 26.4 percent YoY and 7.5 percent QoQ. Retail deposits grew by around 27.8 percent YoY and around 6.9 percent QoQ. Wholesale deposits grew by around 19.4% YoY and around 10.9% QoQ, HDFC Bank said.
The bank’s CASA deposits have aggregated to approx ₹9,09,000 crore as on March 31, 2024, up about 8.7 percent YoY and about 8.8 percent QoQ. Retail CASA grew around 8.8 percent YoY and 6.3 percent QoQ. The CASA ratio of the bank
was around 38.2 percent on March 31, 2024, compared to 44.4 percent on March 31, 2023, and 37.7 percent on December 31, 2023, according to HDFC Bank’s exchange filing.
In addition, in a separate exchange filing after market hours on Thursday, April 4, the lender said it has sold about 3 percent stake in Indraprastha Medical Corporation through the secondary market route on NSE in cash consideration of ₹55.46 crores. After the divestment of its stake, HDFC Bank’s shareholding in Indraprastha now stands at 2.45 percent.
“We wish to inform you that out of 50,31,897 equity shares of ₹10 each held by HDFC Bank till February 28, 2024, in Indraprastha Medical Corporation Limited, the bank sold 27,81,897 shares (representing 3.03 per cent of the share capital of Indraprastha),” HDFC Bank said.
FII ownership declines in Q4
Meanwhile, the equity data for HDFC Bank at the end of March 2024 also showed that there was a decline in ownership by foreign institutional investors (FIIs) during the March 2024 quarter.
Also Read: HDFC Bank: FII ownership falls to 47.8% in March 2024 quarter from 52.3% at the end of December 2023 quarter.
FII ownership in HDFC Bank in March 2024 quarter at 47.83 percent, down from 52.39 percent in December 2023 quarter.
This leads to expectations that there may be some balance and fresh emergence of new foreign investors to make up the gap created by reduced FII stakes in HDFC Bank and the requirement to meet the weightage in the MSCI index.
Also Read: ‘Billions of dollars’: What Helios Capital’s Samir Arora values after FIIs reduce stake in HDFC Bank
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Disclaimer: The views and recommendations above are those of individual analysts, experts and second-hand companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 05 Apr 2024, 09:23 IST