Analysts see 23% upside in HDFC Bank but caution against loan restructuring

HDFC Bank Q2 analysis: Analysts believe investors should keep an eye on restructured loan book even as long-term growth drivers remain intact.

Shares of HDFC Bank retreated from record high levels of Rs 1,725 apiece, hit in the intra-day trade on Monday, and fell to a low of Rs 1,667, as higher-than-expected restructuring of loans in the July-September quarter of FY22 (Q2FY22) clouded sentiment.

Going-forward, analysts believe investors should keep an eye on restructured loan book even as long-term growth drivers remain intact.

“Restructured book was higher at 1.7 per cent (versus 0.68 per cent in Q1FY22) with a large chunk coming in from personal loans (Rs 14,100 crore). Also, experience of one-time restructuring (OTR 1.0), wherein pool saw 20 per cent