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The stock was the biggest contributor to the Nifty downside on Friday, ending with losses of over 2.5%.
HDFC Bank’s business update indicated an advances growth of 3% on a year-on-year basis. On a sequential basis, the advances growth was 0.9%. This is due to the bank’s focus on bringing down the Credit-Deposit Ratio.
Deposit growth for the lender stood at 15.8% from last year and 2.5% on a quarter-on-quarter basis.
Credit-Deposit Ratio slipped below the 100% mark, declining to 99.18% from 111.53% last year. The management has guided for the Credit-Deposit ratio to come down to between 85% and 90%.
Nomura remains neutral on HDFC Bank with a price target of ₹1,870. It said that the loan growth has been soft but deposit growth was healthy. CASA deposits also saw a decline on a sequential basis.
On the flop side, Jefferies maintained a “buy” recommendation on HDFC Bank with a price target of ₹2,120.
The brokerage said that the valuations of HDFC Bank do factor in the soft growth for the lender. It said that the loan growth was soft due to a softer-than-expected pull back and a higher sell-down.
HDFC Bank had another positive year in 2024 in terms of returns, but three out of the last four years have seen single-digit returns for the lender.
Out of the 48 analysts that have coverage on HDFC Bank, 41 of them have a “buy” rating, while seven of them have a “hold” rating on the stock.
Shares of HDFC Bank ended 2.5% lower on Friday at ₹1,748.4. The stock is down 7% from its recent peak of ₹1,880.
First Published: Jan 6, 2025 7:47 AM IST
