HDFC Bank share price gains over 3% as advances grow 21%; this brokerage firm sees 16% upside in stock

HDFC Bank share price has rallied 50 per cent from March low of Rs 739 apiece, taking the market capitalisation to Rs 6,05,852.24 crore

HDFC Bank share price gained over 3 per cent to Rs 1109.85 apiece in Monday’s strong trade after the bank reported a 21 per cent growth in its advances with totalled Rs 10.04 lakh crore on June 30. The bank’s outstanding loans stood at Rs 8.29 lakh crore as of June 30, 2019, and Rs 9.93 lakh crore on March 31, 2020. HDFC Bank share price has rallied 50 per cent from March low of Rs 739 apiece, taking the market capitalisation to Rs 6,05,852.24 crore, according to BSE. “HDFC Bank has delivered strong growth despite economic activity being impacted due to the COVID-19 outbreak. On the asset quality front, slippages are likely to remain elevated due to the COVID-19 disruption from 2HFY21, which could keep credit cost higher; however, higher provisioning buffers should limit the overall impact on earnings,” Motilal Oswal Financial Services said in a recent research report.

HDFC Bank quoted a 52-week high of Rs 1,304.0 apiece on BSE, last year in December. Around 9.40 AM, HDFC Bank shares were trading 3.05 per cent higher at Rs 110.95 apiece, as compared to a 0.95 per cent rise in S&P BSE Sensex.

The bank’s deposits aggregated to Rs 11.89 lakh crore on as of June 30, 2020, a growth of around 25 per cent as compared to Rs 9.54 lakh crore as of June 30, 2019, and Rs Rs 11.47 lakh crore on March 31, 2020. “A strong liability franchise would support margins, and higher liquidity levels would enable the bank to ride out the current crisis and gain higher market share,” brokerage firm Motilal Oswal said.

Research and brokerage firm has given a ‘buy’ rating to the stock with an upside of 16 per cent from the previous close. The brokerage firm has predicted a target price at Rs 1,250 apiece, as HDFC Bank displayed strong business growth in an uncertain macro environment. During the quarter ended June 30, 2020, HDFC Bank purchased loans aggregating Rs 1,376 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited (HDFC).