Banking stocks at 52-week high on hopes of credit growth

The banking stocks continue to rule high on the back of stimulus measures by the Reserve Bank of India that helped revival of economic growth and attraction of foreign funds. Key economic data like the recent Index of Industrial Production (IIP) indicated likely swift recovery of the economy. Factory output at 10.4% in August registered the highest growth rate in 22 months.

Also, steady growth in domestic car sales during the first half of the financial year 2009-10 at 14.51% underlines the demand for consumption level. Car sales grew by double-digits — 20.32% — which is a continuation of the double-digit growth posted in the months of July and August.

With the overall situation improving, and credit at lower rates, major banks see gradual acceleration in loan disbursal. Private banking major HDFC Bank expects loan growth of around 30%.

“We see a good growth in loan disbursals in the next few quarters. HDFC expects an overall 20-25% growth in loan disbursals in 2010,” Deepak Parekh said on the sidelines of a private equity forum last week.

Other banks are also hopeful of credit growth as said after the recent bankers meet with the RBI governor D Subbarao. Significant loan disbursement is expected in the second half of the current fiscal. In Q2 FY10, banks are expected to post better margin due to fall in cost of funds.

Out of 18 banks in the BSE Bankex, 84% or 15 bank stocks have climbed to their all-time high this month, of which 12 have touched their life-time high today.

The BSE Bankex touched its 52-week high of 10,172 today. The BSE Bankex has rallied 179% to 10,155 from its March low of 3,633. The Sensex, on the other hand, have gained 111% to 17,220 from its March low of 8,160.

India's third largest private sector lender Axis Bank posted a 31.95% rise in its standalone net profit at Rs 531.64 crore for the second quarter ended September 30, 2009, as compared to Rs 402.91 crore in the same period a year ago. The scrip touched its life-time high of Rs 1,033 today. The stock is now up 1.2% at Rs 1,025.

Yes Bank also touched its all-time high of Rs 214 today. The stock is now trading near its high at Rs 213. HDFC Bank climbed to its all-time high today at Rs 1,727. The scrip is now at Rs 1,714.

The largest private sector bank ICICI Bank jumped to its high of Rs 984 on October 7. The stock is now at Rs 926. Kotak Mahindra Bank also rallied to its highest so far at Rs 816. The scrip is now up nearly 2% at Rs 813.

The largest PSU bank SBI hit its all-time high of Rs 2,235 on September 30. The stock is currently at Rs 2,222, up 2.5% 

Punjab National Bank also touched its all-time high of Rs 868 today. The scrip is currently up 1.5% at Rs 864. Oriental Bank of Commerce zoomed to its all-time high today at Rs 255. The stock is now up over 2% at Rs 253.

IDBI Bank surged to touch its life-time high today at Rs 150. The stock is now up 1.5% at Rs 133. Indian Overseas Bank is trading at its life-time high of Rs 133, up 1.5%.

Allahabad Bank zoomed to its all-time high of Rs 121 on October 6. The stock is now up 2.5% at Rs 119.

Bank of Baroda also surged to its 52-week high of Rs 507 today. The stock is now up 2.5% at Rs 506. Canara Bank jumped to its all-time high of Rs 358 today. The scrip is now up 1.5% at Rs 357.

Bank of India also registered its all-time high of Rs 418 today. The scrip is now up 1.5% at Rs 415.