Despite good Q4FY23 earnings, shares of HDFC Bank Ltd fell nearly 2% on Monday's trade due to profit booking. The stock has recorded a new 52-week high.
"We had a strong gap up opening, however prices have immediately given up the gains and are trading below Thursday's low. After the recent rally the stock prices are seeing profit booking, where we sense further dip toward 1,600 can be a buying opportunity whereas 1,700 - 1,730 to now act as immediate resistance," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.
On Saturday, the private sector lender reported nearly 20% on-year growth in net profit to ₹12, 047.5 crore for Q4FY23. The lender's net profit was almost in line with the street's estimates.
The private bank's net profit was projected to increase 21% to ₹12,180 crore based on the average of estimates from seven brokerages.
Additionally, the board approved to a final dividend of ₹19 per share.
In the reviewed quarter, net interest income (NII) increased by 23.7% to ₹23,351.8 crore. Deposits and credit growth at the bank were strong and the bank's asset quality remained steady.
Provisions declined both quarter-on-quarter (QoQ) and year-on-year (YoY) at ₹26,85.4 crore, resulting in credit cost of 0.67% versus 0.74% in Q3FY23. Loan growth for the quarter remained healthy at 16.9% YoY and 6.2% QoQ to ₹16.0 lakh crore though a bit of moderation was witnessed compared to previous quarterly growth trend. Deposit accretion was at 20.8% YoY to ₹18.8 lakh crore.
According to ICICI Direct Research report, focus on building distribution capabilities (branch, human resource and technology) is expected to help withstand competition and drive future business growth, though merger with HDFC Ltd to remain in highlight in the near term.
On the technical front, the stock price rose 15.5% and outperformed its sector by 5% in the past year. The stock's weekly average delivery volume is 21.52%.
According to Mintgenie poll, 36 analysts recommend 'strong buy' for the stock.
