HDFC Bank nears all-time high price scaled a year ago; Bernstein sees 26% potential upside

Shares of the country’s leading private sector lender gained over 1 per cent in early trade in Tuesday’s session (June 25) as global brokerage continued with its ‘outperform’ rating on the counter with a target price of Rs 2100. The set target implies an upside of 26 per cent from the previous close. 

At the last count, shares of HDFC Bank were up 0.95 per cent at Rs 1688, while at day’s high it scaled to Rs 1,689.85 levels. Further, after today’s gains, considering day’s high price, the stock is just 4% away from its 52-week high price of Rs 1,757.80 scaled on July 3, 2023.

The global brokerage said that the lender is well positioned to regain its industry leading profitability over the next four years. Also, its return on assets or RoA is set to enhance from 1.8 per cent currently to 2.1 per cent. Loan yield at the company is also seen to improve by around 40-50 bps, while cost of funds which reduce by 18 bps, it added.

Of the 41 analysts tracking the stock, 31 analysts have recommended a ‘strong buy’ on the counter, Trendlyne data shows.

HDFC Bank Q4 results

Net profit at the lender for the Q4 period came in at Rs 16,511 crore, a 0.84 per cent increase over the previous quarter. Notably, the bank’s on-year results could not be compared because of its merger with parent firm HDFC. 

The net interest income (NII) of Rs 29,007 crore versus Rs 28,470 crore reported in the previous quarter.The bank's gross non-performing asset (NPA) stood at 1.24 percent, down from 1.26 percent in the last quarter, while net NPA for the quarter stood at 0.33 percent compared to 0.31 percent.