HDFC Bank Shares hit 52-Week Low: Q3 Earnings Fallout Triggers Market Concerns
As January unfolds, investors find themselves grappling with the unsettling news of HDFC Bank shares hitting a 52-week low, intensifying concerns sparked by the fallout from the bank’s Q3 earnings report. The stock, which fell 10% last week following the announcement of its quarterly results, breached the 52-week low of Rs 1460.55, previously recorded on October 26, 2023.
In the early hours of trading today, HDFC Bank shares extended their losses, reaching a yearly low of Rs 1459.95, a 1.26% decline from the previous close of Rs 1478.65 on BSE. The relative strength index (RSI) of HDFC Bank currently stands at 24.5, indicating that the stock is trading in oversold territory.
The market capitalization of HDFC Bank has tumbled to Rs 11.12 lakh crore amid a broader market rally. The total turnover on BSE amounted to Rs 15.18 crore as 1.04 lakh shares of the bank changed hands.
Despite the large-cap nature of HDFC Bank, the stock is trading below various key moving averages, including the 5-day, 10-day, 100-day, 150-day, and 200-day averages. This downward trend has caught many investors off guard, leading to heightened uncertainties about the future trajectory of the banking giant’s stock.
HDFC Bank’s Q3 Earnings Fallout Continues(BFSI stocks: HDFC Bank and More Among Top Brokerage Calls)
Analysts and brokerages are offering diverse perspectives on the outlook for HDFC Bank shares:
1. CLSA Maintains Buy Rating:
Global brokerage CLSA remains optimistic about HDFC Bank, maintaining a buy rating with a target of Rs 2,025 per share. After interacting with over 20 clients post-Q3 earnings, CLSA acknowledges that while domestic clients express dissatisfaction, foreign investors perceive the end of the earnings per share (EPS) cuts cycle. Key concerns revolve around deposits and net interest margins (NIM).
2. KR Choksey Assigns Target Price:
Brokerage KR Choksey assigns a target price of Rs 1950 to HDFC Bank shares. It values the bank’s standalone business at 2.2 times FY26E P/ABV to Rs 1,716 and the subsidiaries at Rs 233, resulting in a total value of Rs 1,950. This implies an upside of 26.8% from the current price, and the brokerage maintains a “BUY” rating on the shares.
3. Nuvama Downgrades to ‘Hold’:
Nuvama has taken a more cautious stance, downgrading HDFC Bank to ‘hold’ following Q3 earnings. The brokerage is cutting earnings by 5–6% for FY25E–FY26E, citing concerns about the bank’s liquidity coverage ratio (LCR), loan-to-deposit ratio (LDR), and deposit growth. The target is revised to Rs 1,730 from Rs 1,770.
4. Motilal Oswal Sets Target:
Financial services firm Motilal Oswal assigns a target of Rs 1950 to HDFC Bank shares. The brokerage highlights the bank’s flat margin, slightly below expectations, and emphasizes healthy loan growth driven by retail and sustained traction in Commercial and Rural Banking. The management suggests gradual improvement in net interest margins (NIMs) over the coming years.
In its Q3 earnings report, HDFC Bank reported a 34% rise in standalone net profit to Rs 16,373 crore, compared to Rs 12,259 crore in the corresponding quarter of the previous fiscal year. Total income for the October-December quarter of FY24 rose to Rs 81,720 crore against Rs 51,208 crore in the year-ago period.
While the fallout from HDFC Bank’s Q3 earnings has led to varied opinions among analysts, investors are urged to exercise caution and seek advice from qualified financial advisors before making any investment decisions. Business Today provides stock market news for informational purposes only and does not constitute investment advice.