Shares of HDFC Bank, the country’s largest private lender, jumped over 2% in early trade as it prepares to announce its Q2 results on October 16. The stock was trading 2.11% higher at Rs 1,685 on the Bombay Stock Exchange (BSE), contributing significantly to the early inflation on Dalal Street. Investors are showing more interest in HDFC Bank shares, expecting a positive performance in the upcoming quarterly results.
Brokerage firm Arihant Capital, which maintains a buy rating on the stock, said it is trading sideways after six days of decline. The firm predicted a “pullback rally” and highlighted that the momentum indicator (RSI) is showing positive signs, indicating further upside.
Arihant Capital has recommended buying this stock at current levels with a stop loss of Rs 1,600 and a target of Rs 1,751-1,800 in the next few weeks.
Earlier in October, HDFC Bank shared its Q2 business update, revealing that its deposit growth had outpaced its loan growth. After a marginal decline in the previous quarter, gross advances grew 1.3% to Rs 25.19 lakh crore in the quarter ended September. Retail loans grew by Rs 33,800 crore, while commercial and rural banking loans grew by Rs 38,000 crore.
Deposits, on the other hand, grew 5.1% quarter-on-quarter to Rs 25 lakh crore, reversing the stagnant growth seen earlier this year. The bank also reported a 2.3% growth in its low-cost CASA deposits.
After the merger with HDFC in July 2023, the bank received more loans than deposits, increasing its loan-to-deposit ratio (LDR) to 110%. This liquidity challenge led the bank to focus on inflation deposits faster than loan disbursement.
To manage liquidity, HDFC Bank also securitised loans worth Rs 19,200 crore during the second quarter, taking its total securitisation for the year to Rs 24,600 crore.
