HDFC Bank shares fall 2% after hitting 52-week high

Shares of HDFC Bank declined over 2% after hitting a 52-week high of ₹1,715.85 apiece in early trade on the Bombay Stock Exchange on Monday. At 12:31 pm, the share price of HDFC Bank was trading 1.78% lower at ₹1,663.15 on the BSE. Early today, the company's share price opened higher at ₹1,706 as against the closing price of the previous session at ₹1,693.30. During the session, the company’s market capitalisation stood at ₹9,27,576 crore with as many as 2,24,039 shares exchanging hands on the BSE against the two-week average of 1.79 lakh shares. HDFC Bank hit a 52-week low of ₹1,271.75 on June 17 last year.

In the January to March quarter, HDFC Bank reported around 20.6% year-on-year growth in its consolidated net profit at ₹12,594.5 crore for the January-March quarter of FY2022-23. The bank’s consolidated net revenue grew by 20.3% to ₹34,552.8 crore during the quarter under review, as against ₹28,733.9 crore in the year-ago quarter. The bank’s earnings per share for the quarter stood at ₹22.6 and the book value per share as of March 31, 2023, was ₹518.7. Its net interest income (interest earned less interest expended) for the quarter ended March 31, 2023, grew by 23.7% to ₹23,351.8 crore from ₹18,872.7 crore for the quarter ended March 31, 2022.

Following the Q4 results, analysts at Motilal Oswal have recommended a ‘buy’ rating for the private lender, with a target price of ₹1,950. The brokerage firm said that the bank reported an in-line quarter with healthy growth in NII and the asset quality ratio remained robust. According to the brokerage firm, the bank’s core pre-provision operating profit remained modest.

Brokerage firm ICICI Securities maintained the ‘Buy’ rating for the private lender and has raised the target price from ₹1,874 to ₹1,990. The brokerage firm said that the bank utilised gains from higher NII to make investments for the future, which led to elevated opex.

Earlier this month, HDFC Bank released its business update for the fourth quarter that ended March 2023, with its advances and deposits registering double-digit growth, aided by a rise in retail, commercial and corporate loan books. It posted a 16.9% year-on-year (YoY) rise in advances at ₹16,00,500 crore as of March 31, 2023, as compared to ₹13,68,800 crore in the same period last year. On a sequential basis, advances increased 6.32% from ₹15,06,800 crore in the December quarter of FY23.

Last week, the bank proposed raising up to ₹50,000 crore over the next twelve months through private placement mode, subject to board approval. The capital will be raised by issuing perpetual debt instruments (part of additional Tier I capital), Tier II capital bonds, and long-term bonds (financing infrastructure and affordable housing).