The lender’s gross advances jumped 52.6% year-on-year (YoY) to ₹24.87 lakh crore during the April-June quarter. The numbers were down 0.8% quarter-on-quarter (QoQ) from ₹25.07 lakh crore in Q4FY24, driven by a decline in corporate and wholesale loans.
Similarly, HDFC Bank‘s deposits rose 24.4% year-on-year to ₹23.79 lakh crore in the first quarter of this fiscal but remained flat sequentially due to seasonal factors in CASA accounts.
The bank’s current account savings account (CASA) deposits stood at ₹8.63 lakh crore in Q1, witnessing a growth of 6.2% over the figures a year ago. CASA deposits, however, fell from ₹9.09 lakh crore as on March 31, 2024 “which had a seasonal impact”, the lender said.
CASA deposits represent low-cost funds for banks.
Following this, global brokerage firm Nomura assigned a ‘Neutral‘ rating on HDFC Bank, with a price target of ₹1,660 per share. Nomura said that both loan and deposit growth were seasonally soft in the first quarter, with average deposit growth at 4.6% QoQ.
Morgan Stanley, which has an ‘Overweight‘ recommendation, and a price target of ₹1,900 per share, said HDFC Bank’s volume growth was expected to be soft owing to seasonality in the June quarter.
The brokerage said that HDFC Bank reported loan growth, which was down 0.8% QoQ, largely owing to the wholesale segment.
Liquidity coverage ratio (LCR) in Q1 improved sharply to 123% compared to 115% in the previous quarter.
Another brokerage CLSA highlighted that Q1 is seasonally weak but deposit accretion was weaker-than-expected in June, though it maintained an ‘Outperform‘ rating with a target price of ₹1,725 per share.
CLSA said that the total deposit book remained flat QoQ, unlike previous quarters which saw an accretion of ₹30,000-45,000 crore, attributing this to a significant run-down of current account deposits from the previous quarter.
Technical Analyst Manas Jaiswal said that HDFC Bank is looking strong on the medium-term to long-term charts. On the short-term charts, it is looking weak, and is trading below 20-day moving average.
Jaiswal said that HDFC Bank may see some more correction, and can go down and test ₹1,600 levels.
However, the analyst believes this correction to be a great buying opportunity for next two-three months’ time. “The stock has a lot of support near ₹1,500-1,550. So on correction, near ₹1,600 one can take a long position and the stop loss should be around ₹1,490 and the target would be around ₹1,800-1,850 on HDFC Bank.”
HDFC Bank released its shareholding pattern for the April-June quarter, which has seen holdings from Foreign Portfolio Investors (FPIs) decline further compared to the previous March quarter. The resultant decline may result in the lender getting inflows between $3 billion to $4 billion as its weightage in the MSCI indices stands to increase from current levels.
The holdings of Foreign Portfolio Investors was down to 54.83% from 55.54% at the end of the March quarter, according to the data shared on the exchange. Of this holding, FPIs hold 47.17% in the Indian entity, a figure down from 47.83% in the March quarter, while the rest is held in HDFC Bank’s shares listed in the US-listed shares (American Depository Receipts or ADRs).
On the charts, the Relative Strength Index (RSI) of the counter stood at 66.6, indicating its trading neither in the “overbought” or “oversold” zones.
The bank has a one-year beta of 0.9, suggesting low volatility during the same period.
Shares of HDFC Bank were trading 3.92% lower at ₹1,660 apiece on the NSE today. With the dip, the frontline stock turned negative for 2024.
