Shares of India’s largest bank, which suffered negative returns earlier, have staged a strong rebound this year, turning positive. The recent surge, driven largely by mutual funds adjusting their portfolios to include this stock, has propelled its shares up by as much as 12% in the past month.
HDFC Bank Ltd is a large-cap stock, with a market capitalization of Rs 13,05,368 crore. On Tuesday,the company shares were quoted at Rs 1,714.70 per share, up 2.55 percent from the previous close price.
About company: The Housing Development Finance Corporation Limited (HDFC) is the largest private sector bank, which provides a range of banking and financial services including retail banking, wholesale banking, and treasury operations.
HDFC Bank is one of India’s leading private banks and was among the first to receive approval from the Reserve Bank of India (RBI) to set up a private sector bank in 1994.HDFC Bank currently is at the fourth position in the MSCI India Index, with a weight of 3.89%.
Mutual Funds Investments: Mutual funds(MF) have consistently increased their holdings in HDFC Bank shares, with purchases totaling Rs 35,440 crore over the past five months. Specifically, they bought shares worth Rs 12,884 crore in January, Rs 8,432 crore in February, Rs 4,604 crore in March, Rs 1,886 crore in April, and Rs 7,635 crore in May.
SBI Mutual Fund holds the largest stake in HDFC Bank with 36.91 crore shares valued at Rs 56,503 crore in May, followed by ICICI Prudential Mutual Fund and HDFC Mutual Fund with 18.61 crore and 17.86 crore shares, respectively, worth Rs 28,490 crore and Rs 27,337 crore. UTI Mutual Fund, Nippon India Mutual Fund, Kotak Mahindra Mutual Fund, and Mirae Asset Mutual Fund are other major stakeholders.
Financials:In Q4 FY24, HDFC Bank reported robust financial performance, marked by a 37.1% year-on-year increase in profit to Rs 16,512 crore. Net Interest Income (NII) also grew significantly by 24.5% to Rs 29,077 crore.
Moreover, HDFC Bank reported an improved Gross Non-Performing Asset (GNPA) ratio at 1.24%. Total deposits soared by 26.4% year-on-year to with CASA deposits expanding by 8.7%. Gross advances surged notably by 55.4%, culminating at Rs 25,078 crore by the close of the March quarter.
Target:Recently, UBS, a foreign brokerage firm, has given a buy rating on HDFC Bank, with a target price of Rs 1,900 per share citing improvement in banks asset quality and margins and gains in market share.
Shareholding pattern: As per the recent March quarter of shareholding pattern, Foreign institutional investors hold a 47.48 percent stake, while domestic institutional investors hold 33.33 percent and retail investors hold an 18.64 percent stake in the company.
Written by Omkar Chitnis
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