HDFC Bank shares rise post Q2 results. To buy, sell or hold stock?

The share price of HDFC Bank rose about 2% in early trade on the Bombay Stock Exchange (BSE) on Tuesday, as per HT’s sister website Mint. This comes a day after India’s largest private sector bank announced its earnings for the September quarter, its first quarterly results post the July merger with HDFC Limited, the country’s number 1 home loans company that merged with and into the lender.

The headquarters of India's HDFC Bank is pictured in Mumbai, India. (Reuters)
The headquarters of India’s HDFC Bank is pictured in Mumbai, India. (Reuters)

HDFC’s non-performing assets (NPAs) stood at 1.34% of gross advances as on September 30, as against 1.41% on June 30, the Mumbai-based bank’s exchange filing shows.

To buy, sell or hold stock in HDFC?

Most brokerage firm remain positive about HDFC Bank’s stock, retaining their earlier views after the lender’s September numbers.

Nirmal Bang Institutional Equities: The brokerage firm is positive regarding a long-term perspective as it finds high growth potential in the company on account of good capital position, revenue and cost synergies arising out of the HDFC merger, and the best -in-class asset quality. It, however, added that in the near term, there will be key monitorables such as successful merger transition, elevated operating costs (due to continued expansion) and margin trajectory.

Motilal Oswal Financial Services: “HDFC has made a good beginning, and given a huge pace of capacity building, we believe that there are levers in place to sustain this momentum in business growth. Margins are likely to recover gradually, which, along with improved operating leverage, should improve return ratios,” said Motilal Oswal.

(The views and opinions expressed here are of individual analysts and firms)

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