Have HDFC Bank shares in portfolio? Good news likely for investors going forward

The largest private lender HDFC Bank share price has been touching new highs, and many of its investors have ended up profiting magnificently from it. The latest all-time high cracked by HDFC Bank was in the first week of this month at Rs 2,470 per piece on stock exchanges. In a year’s time, the bank has already soared by nearly 22% on the indexes. But exactly where is HDFC Bank shares headed that’s the real question? On Wednesday’s trading session, the share price of this bank was trading at Rs 2,434.95 per piece up by Rs 16.70 or 0.69% on Sensex at around 1335 hours. A year ago on the same day, the shares were just near Rs 2,025. Hence, HDFC Bank has given commendable returns to their investors. Going forward, seems like this bank was just prepping as experts areupbeat on the business portfolio for FY20, and in fact believe the shares  have further potential to rise. 

Expert at Standard Chartered Securities in their note reveal that, the  HDFC Bank stock has been making higher top higher bottom formations on the weekly chart which is a positive sign for the medium term trend. It is also trading above the 200 and 50 DMA with the 50 DMA crossing over the 200 DMA giving a buy signal. The weekly and the monthly RSI is above the 60 mark which indicates a multibagger pattern while the super trend indicator is in buy mode. 

During Q4FY19, the bank reported total income growth of c.23.5% y/y in Q4 FY19. Net interest income rose c.22.8% y/y and fee income grew c.26.1% y/y. Fee income growth moderated for the payment business (credit cards and debit cards). The mutual fund distribution fee income was also impacted due to regulations on upfront fees and reduction in trail fees. Net profit for the quarter grew 22.6% to INR 58.85bn.Total advances were up c.24.5% y/y to c.INR 8.2trn.

Also,  domestic retail loans (c.54% of total loans) grew c.19% y/y while domestic wholesale loans (c.46% of total loans) rose c.31.9% y/y. Net interest margins were reported at 4.4%. The bank reported stable asset quality, with gross non performing assets (NPAs) at c.1.36% in the quarter ended March 2019 as against c.1.38% a year ago and c.1.30% as of 31 March 2018. The provisioning coverage ratio stood at c.71%. Net NPAs were at c.0.4% as on March 2019.  

That is why, the note says, “The stock has very good support at INR 2350 which is the recent swing low while resistance is seen at INR 2500, above this it can move towards INR 2800.”

Hence, if you are still holding HDFC Bank shares well then good news is that the lender is set to add more money in your kitty. While for new investors, this bank is an appealing stock and can be added in the portfolio.