Analysts expect HDFC Bank shares to grow one-fourth in value after strong Q3 show

HDFC Bank share price: The stock of HDFC Bank were in demand on Monday, after the country's largest lender by market value reported a strong set of earnings last week. Analysts expect up to 25 per cent upside potential in HDFC Bank shares. 

On Saturday, HDFC Bank reported an 18.5 per cent increase in net profit to Rs 12,259.5 crore for the for the October-December period compared with the correspinding period a year ago. Its net interest income (NII) -- or the difference between interest earned and interest paid -- grew 24.6 per cent on year to Rs 22,987.8 crore, according to a regulatory filing.

Both topline and bottomline exceeded analysts' estimates. According to Zee Business research, HDFC Bank's quarterly net profit was estimated at Rs 11,900 crore and revenue at Rs 22,500 crore.

Anil Singhvi's view

Zee Business Managing Editor Anil Singhvi expects HDFC Bank shares to help the Nifty Bank hold the support zone of 42,025-42,175. "A move below those levels is expected to be followed by strong buying around 41,725-41,875 levels," he said. 

"On the higher side, one can expect levels of 42,575-42,725 followed by the 42,825-42,950 zone, where selling may occur," Singhvi added.

Here's what brokerages say after HDFC Bank results:

BofA Securities maintains buy with a target price of Rs 2,000  

The brokerage expects the catch-up in net interest margin to remain gradual for HDFC Bank going forward. HDFC Bank reported a core net interest margin -- a key measure of profitability for lenders -- of 4.1 per cent on total assets, and 4.3 per cent based on interest earning assets.

BofA highlighted robust loan growth led by retail and commercial segments in HDFC Bank, and said branch expansion is on fast track.  

Macquarie maintains 'outperform' with a target price of Rs 2,005

The brokerage's target price envisages potential upside of 25.2 per cent in HDFC Bank shares from Friday's closing price. 

Jefferies said the HDFC Bank timelines are largely on track.

The stock rewarded investors with a return of 14.4 per cent in the quarter ended December 2022, a period in which the 30-scrip gauge rose 5.9 per cent.

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