Private sector lender HDFC Bank surged over 3 per cent in intra-day deals on Monday, November 25 to a fresh record high of ₹1801.90. This is the first time the stock has crossed the ₹1,800 mark. The rally comes as the broader market gained significantly, driven by the BJP-led NDA's victory in the Maharashtra elections.
With today's rise, the stock has now climbed over 32 per cent from its 52-week low of ₹1,363.45, hit in February 2024. The stock ended 2.21 per cent higher at ₹1,784.60 apiece.
The private sector lender has risen around 14 per cent in the last one year and over 4 per cent in 2024 so far. In comparison, the benchmark Nifty Bank has gained over 19 per cent in the last one year and 8 per cent year-to-date (YTD).
The rise in the lender is also driven by the MSCI rebalancing, which takes effect today. Analysts anticipate inflows of approximately $2.5 billion into Indian markets, with HDFC Bank expected to corner a major chunk of these inflows.
HDFC Bank's weightage in the MSCI Emerging Markets (EM) Index is set to increase, attracting an estimated $1.9 billion in foreign institutional investor (FII) inflows. This adjustment represents the second phase of a planned weightage increase, initially outlined in the MSCI review in August 2024.
HDFC Bank reported a 5.3 per cent increase in standalone net profit, reaching ₹16,821 crore in the September quarter, compared to ₹15,976 crore in the same period last year. Net interest income (NII), representing the difference between interest earned and interest paid, grew by 10 per cent to ₹30,110 crore, up from ₹27,390 crore in the previous year.
This quarter marks the first year-on-year comparison since the bank's merger with its parent, Housing Development Finance Corp (HDFC), was completed in July 2023. Following the merger, HDFC Bank added a substantial loan portfolio but a relatively smaller volume of deposits. This dynamic has increased the urgency for the bank to accelerate deposit mobilisation or moderate loan growth in the coming quarters to maintain balance sheet stability.
Sumeet Bagadia, Executive Director at Choice Broking stated that HDFC Bank shares are looking bullish on the technical chart. The banking share has given a fresh breakout on the chart pattern at the ₹1800 mark, but a decisive break above ₹1800 on a closing basis is still awaited, he said.
“HDFC Bank shareholders are advised to hold the scrip, maintaining a stop loss at ₹1,740 apiece. Fresh investors can also buy HDFC Bank shares at the current market price for the short-term target of ₹1,850 per share,” Bagadia advised.
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