HDFC Bank shares fell as dip buyers were insufficient following Wednesday s crash, resulting in a loss of Rs 1.3 lakh crore in market capitalisation. Investor concerns include flat NIM despite ICRR withdrawal and decline in LCR. Deposits grew slowly compared to guidance. Jefferies sees potential in HDFC Bank s valuation and emphasizes NIM expansion for stock movement. Nomura downgraded the stock due to funding mix challenges.
Shares of HDFC Bank crashed over 7% to Rs 1,560 on Wednesday following its Q3 results. Despite a 34% uptick in net profit, investors were unimpressed by loan growth and margins. Top brokerages red-flagged loan growth and lower liquidity coverage ratio (LCR) while maintaining their ratings. HDFC Bank reported a good set of numbers with net profit rising 34% YoY to Rs 16,372.54 crore. Net interest income (NII) rose 24% YoY to Rs 28,471.34 crore. CLSA maintained a buy view, Morgan Stanley remains overweight, Kotak Equities retained buy, and Nuvama downgraded to hold.
CLSA and Axis Securities have raised their target prices for HDFC Bank, while fund manager Saurabh Mukherjea believes the bank s valuations are attractive. Despite concerns about deposit growth, Mukherjea remains confident in the bank s solid operational performance and sees potential for further investment. Marcellus, the firm managed by Mukherjea, has significant investments in HDFC Bank.
HDFC Bank, India s second most-valued stock, recorded its worst daily performance since the Covid crash 3 years ago, falling 8.5% and causing a market crash. Investors in the bluechip lost over Rs 1 lakh crore as the market capitalisation of the Nifty heavyweight fell to Rs 11.67 lakh crore. Several brokerages have reduced their target prices on the stock, contributing to the downfall.