HDFC Bank share price

Why did HDFC Bank see a sharp decline? What should investors do? Brokerage gave this advice after the analyst meet.

HDFC Bank share price

HDFC Bank share price: After opening with a gap-down on September 20, the share witnessed a decline of around 4% intraday.

HDFC Bank share price News:

Due to the analyst meet, HDFC Bank, a heavyweight share in the private banking sector, is in focus. After opening with a gap-down on September 20, the share witnessed a decline of around 4% intraday. What is the reason for such a significant decline in the share?

What impact can be seen on the company’s business after the merger? Zee Business’s research team has prepared a special report on this. Along with that, what should investors do with the share? Details about the global brokerage’s rating and target on the share are also provided.

Due to the high liquidity during the merger in HDFC Ltd,

there may be a decrease of 20 to 25 bps in NIM.
By the end of Q1, HDFC Ltd will have liquidity of up to 1 trillion rupees.
The Bank’s NIMs could range from 3.7% to 3.8%, dropping from 4.1%.
The Bank’s NIMs may stay at 3.5% in Q2FY24, going below 4.1%.
Nomura has cut its FY24 NIM estimate by 25 bps and FY25 NIM estimate by 15 to 20 bps.
There might be pressure on NIMs in the next 2 to 3 quarters.
Expect stability in NIMs from FY25 onwards.

Net worth:

There was a decrease in the net worth of HDFC Ltd. At the end of June, it stood at 1.12 trillion compared to 1.34 trillion in March. The decrease in net worth is due to changes in accounting. At the beginning of July, HDFC Bank’s BVPS (Book Value Per Share) dropped to below 525 from 519.

Impact on loans and advances

An estimated increase of 12% in 9MFY24.
Anticipating a future growth of 17% CAGR.
Due to slow growth in HDFC’s mortgage business, there is a decrease in loan growth.
The impact of a decrease in HDFC’s wholesale book.

Other impacts on the bank:

GNPA will increase from 1.2% to 1.4%, and NNPA will increase from 0.3% to 0.4%.
Due to an increase in HDFC’s NPA, HDFC Bank’s NPA has also increased.
In FY23, HDFC’s ROA was 2.4% in IND AS, which decreased to 1.8% in IGAAP.
There was an increase in HDFC Ltd’s cost-to-income ratio, which rose from 10% to 19%

 

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