HDFC Bank Share Projections (Image Source: iStockphoto)
In Q4FY24, HDFC Bank reported robust deposit growth, marking a significant uptick in its financial performance amidst a challenging liquidity environment. The bank’s incremental deposits surged to Rs. 1,66,000 crore, a substantial increase from Rs. 41,100 crore in the previous quarter. This surge in deposits is a key indicator of HDFC Bank’s resilience and market confidence.
HDFC Bank witnessed a remarkable 7.5 per cent quarter-on-quarter (q-o-q) growth in overall deposits. This strong performance underscores the bank’s ability to attract funds even in a tight liquidity scenario, reflecting trust and reliability among investors.
The bank’s CASA (Current Account Savings Account) deposits, considered a cost-effective source of funds, experienced robust growth of 8.4 per cent q-o-q. The CASA ratio, standing at 38.2 per cent, indicates a healthy mix of low-cost deposits in HDFC Bank’s funding structure.
The surge in deposit mobilisation has outpaced the growth in gross advances, leading to a faster normalisation of the credit-deposit ratio. This trend suggests a balanced approach in managing assets and liabilities, ensuring sustainable growth and stability.
HDFC Bank’s gross advances grew by 1.6 per cent q-o-q, with the commercial and rural banking (CRB) segment witnessing a robust growth of ~4.2 per cent q-o-q. However, the wholesale book saw a decline of ~2.2 per cent q-o-q, reflecting a strategic shift towards retail and CRB segments.
While net interest margins (NIMs) are expected to remain rangebound in the near term, gradual improvement is anticipated over the next 12-15 months. This improvement is attributed to the replacement of high-cost wholesale funding with retail funding and a favorable shift in the loan mix towards high-yielding retail segments.
HDFC Bank Share Price Target 2024
According to Sharekhan BNP Paribas report, analysts maintain a positive outlook on HDFC Bank, reaffirming a Buy rating with an unchanged price target (PT) of Rs. 1,900. The current valuation, trading at 2.1x and 1.8x its FY2025E and FY2026E core BV estimates respectively, indicates reasonable pricing and strong growth potential.
The analysts emphasise the importance of monitoring NIM progression and retail deposit mobilisation as key factors driving future performance.
On Wednesday, the shares of HDFC Bank closed at Rs 1,534.95. The 52 week high and low of the share is Rs 1,757.50 and Rs 1,363.55 respectively.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. TN NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
