Private sector lender HDFC Bank rose over 3 per cent in intra-day trades on Monday, November 25 to a fresh record high of ₹1801.90. The stock has now surpassed ₹1,800 for the first time. The rally coincides with a sharp increase in the overall market due to the BJP-led NDA’s triumph in the Maharashtra elections.
The stock has now increased by more than 32% since its 52-week low of ₹1,363.45, which was reached in February 2024. At ₹1,784.60 per share, the stock ended 2.21 per cent higher.
The private sector lender has increased by more than 4% in 2024 thus far and by over 14% in the past year. In contrast, the benchmark Nifty Bank has increased by more than 19 per cent in the past year and by 8 per cent so far this year.
The MSCI rebalance, which goes into force today, is another factor driving the lender’s increase. Analysts predict that HDFC Bank will control a significant portion of the about $2.5 billion in inflows into Indian markets.
With an anticipated $1.9 billion in foreign institutional investor (FII) inflows, HDFC Bank’s weighting in the MSCI Emerging Markets (EM) Index is expected to rise. This change is the second stage of a projected weighting increase that was first described in the August 2024 MSCI review.
In the September quarter, HDFC Bank’s standalone net profit increased by 5.3% to ₹16,821 crore from ₹15,976 crore in the same period the previous year. The difference between interest earned and interest paid, or net interest income (NII), increased by 10% to ₹30,110 crore from ₹27,390 crore the year before.
Since the bank’s July 2023 merger with its parent company, Housing Development Finance Corp (HDFC), this quarter represents the first year-over-year comparison. HDFC Bank added a sizable loan portfolio after the merger, although its deposit volume was comparatively lower. Too preserve balance sheet stability, the bank must now expedite deposit mobilization or reduce loan growth in the upcoming quarters.
According to Choice Broking Executive Director Sumeet Bagadia, the technical chart indicates that HDFC Bank shares are positive. A clear break over ₹1800 on a closing basis is still pending, he noted, notwithstanding the banking share’s recent breakthrough on the chart pattern at that level.
“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.
