HDFC Bank share price declined over 2 per cent in intraday trade on Wednesday, February 14, to hit its fresh 52-week low of ₹1,363.45 on the BSE. HDFC Bank share price opened at ₹1,380.90 against the previous close of ₹1,394 and cracked over 2 per cent to the 52-week low level.
The stock has been under strong selling pressure this year. At the current market price of ₹1,363.45, HDFC Bank share price has fallen by over 20 per cent in the calendar year 2024 so far. Most of this loss occurred after the lender's December quarter earnings.
Also Read: HDFC Bank raises $300 million via maiden sustainable finance bond issue
India’s largest private sector lender reported a net profit growth of 33 per cent year-on-year (YoY) to ₹16,372 crore in the third quarter of FY24. The bank’s net interest income (NII) in Q3FY24 rose 24 per cent YoY to ₹28,470 crore.
The bank recorded loan growth of 4 per cent QoQ while deposits grew 2 per cent. Its Liquidity Cover Ratio (LCR) fell to 109.8 per cent from 120 per cent QoQ due to a drawdown of liquid assets to fund loan growth. The bank’s loan-to-deposit ratio (LDR) rose from 108.4 per cent to 110.5 per cent QoQ. The LDR for standalone HDFC Bank was 89 per cent in Q3FY24 versus 85 per cent in Q1FY24.
Also Read: HDFC Bank Q3 results: From HDB Financial IPO to distribution network - 5 important things to know from management call
Analysts believe the stock could be accumulated at the current juncture for the long term.
Foram Chheda, CMT, and the founder of ChartAnalytics.co.in observed that after forming a top near ₹1,720 last year in December, the stock price of HDFC Bank witnessed a steep corrective decline that has taken it to a new 52-week low today. This certainly highlights a very weak underlying trend.
However, Chheda added that the stock has now entered the oversold zone.
"Although there are no signs of any confirmation as yet, HDFC Bank looks to be in the process of forming a base for itself. Investors should not jump in at once but the stock certainly qualifies for accumulation at the current and each subsequent lower level," said Chheda.
Shiju Koothupalakkal, a technical research analyst at Prabhudas Lilladher observed that HDFC Bank stock has been witnessing profit booking after the short pullback from ₹1,380 level. Currently, it has been maintaining a weak bias breaching below the previous low of ₹1,380.
Further, Koothupalakkal pointed out that the RSI has been hovering near the oversold zone for quite some time and technically, only a decisive breach above ₹1,450 would improve the bias. On the downside, the level of ₹1,280 would be the crucial support below which, the overall trend would turn bearish, said Koothupalakkal.
Meanwhile, the Reserve Bank of India (RBI) on February 5 approved HDFC Bank Group's proposal to acquire "aggregate holding" of up to 9.50 per cent in six banks including Axis Bank, Bandhan Bank, ICICI Bank, IndusInd Bank, Suryoday Small Finance Bank, and Yes Bank.
Also Read: HDFC Bank Group gets RBI nod to buy up to 9.5% in Yes Bank, Axis Bank, 4 others
As Mint reported earlier, the approvals were issued following applications made by HDFC Bank (acting as a promoter/sponsor of the Group) to RBI on December 18, 2023. The RBI's approval is valid for one year from the date of the RBI's letter, expiring on February 4, 2025.
HDFC Bank is required to ensure that the "aggregate holding" in the aforementioned banks does not surpass 9.50 per cent of the paid-up share capital or voting rights of the respective banks at any given time.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 14 Feb 2024, 12:33 PM IST
