On the most recent trading day i.e. 7th November 2023, HDFC Bank initiated at ?1494 and concluded at ?1490. Throughout the day, the stock reached its peak at ?1494 and experienced a low of ?1477. The bank's current market capitalization stands at ?1,12,6865.95 crore. It's worth noting that the stock's performance over the past year shows a 52-week high of ?1757.8 and a 52-week low of ?1460.25.
India¡¯s largest bank has been bleeding money on the stock market for quite a while now. In the past 6 months, the stock of HDFC Bank has given negative 12.48% return.
Post-merger with HDFC, there are many issues in the hands of the management to be solved.?
The bank has contingent liabilities of Rs.18,22,393 Cr. The working capital days for the bank have increased from -7.26 days to 92.2 days post merger with HDFC.?
FIIs pulling out investments is also a reason behind the bad performance of HDFC Bank and India¡¯s major indexes like Sensex and Nifty 50.?
Well, not all is negative.?
Prominent international financial firms, Morgan Stanley and Jefferies, have upheld their 'buy' recommendations for the largest private sector bank in the country. Morgan Stanley has set a target price of Rs 2110 for HDFC Bank which is a 40% return to the investor at current market price.?
JM Financial has also maintained a buy call on HDFC Bank with a target price of Rs 1850 which is a 25% return.?
1. HDFC Bank has been giving consistent returns of at least 16% every year for the last 12 years.?
2. Compounded Sales Growth for HDFC Bank in the last 10 Years is 17%, for? 5 Years, it is 15%, for 3 years it is 12%.?
3. There¡¯s nothing fundamentally wrong with the company, the management is capable and has given consistent returns. The bank is led by the very experienced Mr Sashidhar Jagdishan, who has been with the bank since 1996 and has witnessed and played an important role in the growth of the bank.?
4. The price at which the HDFC Bank is available right now is heavy discounted and a position can be made right now.?
5. The bank has been beating its net profit since the last 12 years, every year. It¡¯s sitting at all time high net profit and the upside is still looking positive.?
6. The stock has given a CAGR of 16% - 10 year timeline.?
7. The stock has barely moved in 2021, despite the record-breaking profit and sales. So technically the stock is available at the profit and sales numbers of 2021 but the stock price hasn¡¯t accounted for the profit growth and sales.?
Final verdict: The HDFC Bank is in a consolidation phase and buying positions can be made. The stock might regulate in the current price zone before making an upside move. It will also be very interesting to see when the FIIs become the net buyers in the Indian stock market. If and when FIIs will start investing in the market, HDFC Bank is bound to give returns.
Disclaimer: This is not investment advice. It¡¯s an opinion piece. Indiatimes is not responsible. Stock market is subject to market risk, please read all the offered documents carefully.?