HDFC Bank: Brokerages bullish on stock post Q4 update; Citi sees 40% upside

HDFC Bank share price, HDFC Bank share price target, HDFC Bank news, HDFC Bank Q4 update: Shares of HDFC Bank, the country’s largest private sector lender by sales as well as market value, were in the spotlight for the second consecutive session on April 5 due to multiple factors, such as a healthy Q4 business update that caused its ADRs, or American Depository Receipts, in the overnight trade to settle 5.1 per cent higher.

Further, HDFC Bank on Thursday sold a 3.03 per cent stake in Indraprastha Medical Corporation Ltd. for Rs 55.46 crore through the secondary market route on the NSE.

In the opening deals, the stock was trading 0.53 per cent higher at Rs 1,536 on the BSE.

HDFC Bank Q4 update: Loan book crosses Rs 25 lakh crore

HDFC Bank's loan book crossed Rs 25 lakh crore in the fourth quarter ended March 2024.

The bank's gross advances aggregated to Rs 25.08 lakh crore as of March 31, 2024, a growth of 55.4 per cent over Rs 16.14 lakh crore as of March 31, 2023.

The figures for the period ended March 31, 2024, include the operations of erstwhile HDFC Ltd, which amalgamated with HDFC Bank on July 1, 2023, and hence are not comparable with those of the corresponding period of the previous year, it said.

However, the loan growth on a quarter-to-quarter basis increased by a marginal 1.6 per cent as compared to Rs 24.69 lakh crore at the end of December 31, 2023. This growth is comparable.

As per the bank's internal business classification, domestic retail loans grew around 109 per cent over March 31, 2023, and around 3.7 per cent over December 31, 2023.

The bank's commercial and rural banking loans grew by 24.6 per cent over March 31, 2023, and by around 4.2 per cent over December 31, 2023, it said. The corporate and other wholesale loans, excluding non-individual loans of the erstwhile HDFC Ltd, grew around 4.1 per cent over March 31, 2023.

The bank's deposits aggregated to Rs 23.8 lakh crore as of March 31, 2024, a year-on-year growth of around 26.4 per cent over Rs 18.83 lakh crore and of around 7.5 per cent over Rs 22.10 lakh crore as of December 31, 2023. Read more

HDFC Bank share price target: How do global brokerages view HDFC Bank down the line? Citi sees 38 per cent upside on HDFC Bank

Citi has maintained a buy call on HDFC Bank with a target price of Rs 2,050, the highest among its peers. The revised target implies a 38 per cent upside.

Brokerage firm Jefferies has also maintained its 'buy' rating on the stock with a target of Rs 1,800.

HSBC has also continued with a buy call with a target of Rs 1,750. According to the brokerage deposit performance (+Rs1.66tn deposits q-o-q) in 4Q, it is above estimates of +Rs1.2-1.3tn. Valuation at 13x FY26e EPS is still very attractive, as per HSBC.

In addition, Morgan Stanley has maintained an overweight rating with a target of Rs 1,900. The brokerage highlights the following points from the Q4 update:

-Deposit Growth surprises positively

-Overall deposit growth accelerated to 7.5 per cent (+17 per cent YoY), vs. 2 per cent in the prior quarter

-Retail deposit growth strong (+7 per cent QoQ; an increase of Rs1.3trn)

-Gross loan growth moderated to 2 per cent QoQ, vs. 5 per cent in the prior quarter

HDFC Bank shares: Past performance

The HDFC Bank stock has given a negative return of nearly 8 per cent in the last year, underperforming headline index Nifty50’s rise of nearly 30 per cent and banking gauge Nifty Bank’s over 17 per cent.

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