HDFC Bank Stock Price Rises On Strong Q2 Earnings
The share of HDFC Bank opened higher and is trading with gains of more than 2% following the September quarter earnings, which appears to have sated the mood of investors and brokerages alike. The stock is currently trading at Rs 1015, which compares to Friday’s closing price of Rs 994. The stock has fallen 43% over a year-to-date period and over 40% in the last 12 months.
Q2 Earnings Highlights
The positive mood in HDFC Bank’s share price comes on the back of the lender’s September quarter earnings, where net profit rose 11% on a year-on-year basis to Rs 18,641 crore. A bigger positive for HDFC Bank was the improving asset quality and strong margin outlook, factors that were highlighted by Jefferies in its post-earnings note for the counter.
Key highlights of the Q2 earnings include:
- Profit up 10.8% to Rs 18,641 crore versus Rs 16,821 crore.
- Net interest income up 4.8% to Rs 31,552 crore versus Rs 30,114 crore.
- Provisions up 30% to Rs 3,501 crore versus Rs 2,700 crore.
- Gross NPA ratio down 16 bps to 1.24% versus 1.40% (QoQ).
- Net NPA ratio down 5 bps to 0.42% versus 0.47% (QoQ).
- Other income up 25% to Rs 14,350 crore versus Rs 11,483 crore
Jefferies Ups Target Price
The brokerage firm even went on to maintain a ‘buy’ rating on HDFC Bank while hiking the target price from Rs 1,200 to Rs 1,240. The brokerage has also lifted HDFC Bank’s earnings estimates by 2-6%, adding that the lender remains one of its top picks in the sector.
For investors looking to invest in the stock market, HDFC Bank’s strong Q2 earnings and improving asset quality make it an attractive option. However, it’s essential to do your own research and consider your investment goals and risk tolerance before making any investment decisions.
Technical Analysis
HDFC Bank shares are currently trading at a relative strength index of 74, which suggests that the stock might be in an overbought territory. This could lead to a correction in the short term, but the long-term outlook remains positive.
Investors can also consider technical analysis of stocks to make informed investment decisions. By analyzing charts and trends, investors can identify potential buying and selling opportunities.
Conclusion
In conclusion, HDFC Bank’s strong Q2 earnings and improving asset quality have led to a surge in its stock price. With Jefferies maintaining a ‘buy’ rating and increasing the target price, the outlook for the bank remains positive. However, investors should always do their own research and consider their investment goals and risk tolerance before making any investment decisions. For more information on stock market news and updates, visit our website.
