HDFC Bank, India's largest private sector lender, achieved a remarkable milestone as its market capitalisation surged past ₹14 trillion during Thursday's intra-day trades. This comes as the stock hit a record high of ₹1,832.75 on the BSE, marking a gain of 1.2%.
Consistent growth fuels HDFC Bank's rise
HDFC Bank's stock has demonstrated impressive momentum, rising for the fifth consecutive session with a cumulative gain of 5.2% during this period. On Monday, it surpassed its previous peak of ₹1,791.90 from July 2024. Over the past six months, the stock has soared nearly 20%, far outperforming the 6.7% rise in the BSE Sensex.
Post-merger, HDFC Bank has solidified its position as the second-largest bank in India, with a loan portfolio of ₹24 trillion. Its superior return ratios and consistent operational performance have been pivotal in achieving premium valuations. Analysts credit the bank's strategic focus on optimising its credit-deposit ratio and enhancing its retail loan mix as key drivers of this growth.
A lucrative prospect for share market investment
HDFC Bank's robust Q2FY25 performance, characterised by stable margins and significant deposit growth, highlights its potential for long-term gains. The bank's ongoing efforts to optimise its loan-deposit ratio and replace high-cost borrowings are expected to yield steady margins and improve its positioning in the share market.
Notably, analysts have given a 'BUY' rating on the stock with a target price of ₹1,931. This makes HDFC Bank a compelling option for those looking to explore share market investment opportunities with a focus on stable returns.
Adding to its appeal, HDB Financial Services, a subsidiary of HDFC Bank, has filed a ₹12,500 crore IPO, offering further diversification prospects for investors.
Key takeaways
Future outlook: Optimised credit-deposit ratios and the upcoming HDB Financial Services IPO add to its long-term growth appeal.
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