HDFC Bank share price jumps 2.7% to near 3-week high on record Q2 results, what brokerages say

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Published: October 22, 2018 12:37:10 PM

HDFC Bank share price: Shares of India’s major private sector lender HDFC Bank surged on Monday, after the bank reported strong Q2 results.

HDFC Bank share price: Shares of India’s major private sector lender HDFC Bank surged on Monday, after the bank reported strong Q2 results. HDFC Bank share price jumped as much as 2.7% in the morning trade on Monday to hit an intraday high of Rs 2,020 on NSE. The bank has reported a 20.6% jump in its profit on-year to a record Rs 5,005 crore in the second quarter of the financial year 2018-19. Total income of the bank in the second quarter was Rs 28,215.2, up 21.2% from Rs 23,276.2 crore on-year. The share prices of Rs 2,020 was last observed on October 3rd. 

Taking stock of the reported results, Morgan Stanley said that HDFC Bank’s profit growth (PAT) was broadly in line with estimates. The research firm has raised the target share price on the shares to Rs 2,550. Motilal Oswal has increased FY19/20 profit estimates on the back of improving business momentum. The strong growth continues, and the business is gaining more momentum, Motilal Oswal observed. The research and brokerage firm has raised the target share price on the shares to Rs 2,400. The PAT growth is expected to be 22% over FY18-20, further the NIM moderation is expected to be limited.

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Edelweiss said that the bank had yet another consistent quarter with improved traction in core operating profitability. According to the research firm, HDFC Bank’s sound fundamentals were leading to a growth in  market share and spurring loan growth. The asset quality was steady and there was a stable outlook as well, noted the firm. Edelweiss sees an upside of about 25% from the current price levels.

For HDFC Bank, NII, the difference between interest earned and interest expended, grew 20.6% to Rs 11,763.41 crore compared to the same quarter last year. “NII growth was driven by average asset growth of 22.9% and a net interest margin of 4.3%,” the bank said.

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