Despite half of its constituents ending the session in red, the Bank Nifty on Wednesday hit a record high after two of the index heavyweights — HDFC Bank and ICICI Bank — hit highs. The Bank Nifty closed the session at 23,424.80 or 0.50% higher. Together, HDFC Bank, which hit a lifetime high, and ICICI Bank, which touched a 52-week high, constitute more than half of the Nifty Bank Index.
Since the start of 2017, the Bank Nifty has outperformed the broader market indices, appreciating by 28.87% against the Nifty’s rise of 17%. While entire outstanding equity shares of ICICI Bank are available for trading, HDFC Bank has 74% as free float.
For the quarter ended March 2017, HDFC Bank reported a profit of Rs 3,990 crore, an increase of 18% year-on-year. In a note to investors after the results, CLSA said HDFC Bank benefitted from improvement in the CASA ratio and slower re-pricing of loans. The report further said the bank could post 21% CAGR in the profit over FY17-20, led by a top line growth and the stable asset quality.
ICICI Bank reported a standalone net profit of Rs 2,025 crore for the March quarter of FY17, close to thrice of its net profit in the same period last year. Shares of Federal Bank and Canara Bank have appreciated by 66.7% and 37.23% year to date, respectively, making them the best performing banking stocks so far this year. Shares of State Bank of India have appreciated 15% year to date.