Investor’s Dilemma: Should You Buy, Sell, or Hold HDFC Bank Shares After Q3 Results?
Investor’s Dilemma: Should You Buy, Sell, or Hold HDFC Bank Shares After Q3 Results?
The share price of HDFC Bank dropped by nearly 8% in early trading on Wednesday, following the release of the company’s quarterly financial results. The stock opened at ₹1,583.85, lower than the previous close of ₹1,678.95, and quickly fell by 8% to reach ₹1,545.35. By 2:35 pm, HDFC Bank shares were trading around 7.84% lower at ₹1,547.25 on the BSE.
HDFC Bank’s US-listed shares dropped by 6.71% on the NYSE after the release of their Q3 financial results. The bank’s net profit for this quarter reached ₹16,372 crore, a 33% increase compared to ₹12,259 crore the previous year. The net interest income also saw growth, rising to ₹28,471 crore from ₹27,385 crore in the previous quarter. The core net interest margin remained unchanged sequentially, but increased by 3.4% on total assets and 3.6% on interest-earning ones year-on-year.
HDFC Bank’s gross non-performing assets (NPAs) increased slightly from 1.23% to 1.26% in Q3 of FY24, while net NPAs decreased from 0.33% to 0.31%. Despite reporting in-line Q3 numbers, the bank’s share price declined, possibly due to investor concerns about flat Q3 margins. However, brokerage firm Motilal Oswal Financial Services maintains a buy rating on HDFC Bank stock with a target price of ₹1,950. They highlighted that the bank’s earnings were in line with expectations, driven by healthy other income and steady loan growth. Margins were largely flat, but loan growth was strong, particularly in retail and commercial and rural banking. Asset quality ratios improved, and the provisioning coverage ratio increased to about 75%.
