HDFC Bank shares give up gains on profit-booking

Agencies | Updated on: Apr 23, 2018

HDFC_BANK

Shares of HDFC Bank Ltd rose as much as 1.2 per cent to ₹1,979 in early trade today before slipping into negative territory.

At about 10 am, the stock was quoting at ₹1,944, down ₹11.90 or 0.61 per cent as traders opted to book profits at higher levels.

The company’s Q4 profit increased 20.3 per cent to a record ₹4,799 crore , despite a rise in bad loans. March-quarter gross non-performing loans as a percentage of total loans up to 1.3 per cent from 1.29 per cent in the December quarter, and compared with 1.05 per cent a year earlier, the company said on Saturday.

Slower corporate growth reflects preference for spreads over growth, “pleasantly surprised by continuous reduction in cost-to-asset ratio and higher fees,” Jefferies analysts write in a note, retaining 'buy' with a price target of ₹2,360.

Any sharp rise in non-performing loans can be detrimental to earnings since co would need to scale back lending in some segments, resulting in pressure on net interest margin, lower fees and higher operating expenses, said Kotak Institutional Equities analysts. Forty-two of 49 brokerages rate the stock “buy” or higher, four “hold” and three “sell” or lower; their median price target is ₹2,288.

Published on April 23, 2018
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