HDFC Bank stock hits new all-time high, market-cap tops Rs 14 trillion

In the past six months, HDFC Bank has outperformed the market by surging nearly 20 per cent, as compared to 6.7 per cent rise in the BSE Sensex.

HDFC Bank's market capitalisation (market cap) topped the Rs 14 trillion mark for the first-time ever in Thursday's  intra-day trades as stock price of the largest private sector lender hit a record high on the BSE. 

Shares of HDFC Bank touched a new high of Rs 1,832.75, gaining 1.2 per cent on the BSE in intra-day trade. The stock was trading higher for the fifth straight session, and has gained 5.2 per cent during this period. On Monday, the stock crossed its previous high of Rs 1,791.90 touched on July 3, 2024.

 

In the passt six months, HDFC Bank has outperformed the market by surging nearly 20 per cent, as compared to 6.7 per cent rise in the BSE Sensex. At 09:29 am; with Rs 13.98 trillion market cap, HDFC Bank was trading 1 per cent higher at Rs 1,829. In comparison, the benchmark index up 0.04 per cent at 80,268.

 

 

Reliance Industries leads the list with Rs 17.48 trillion market cap followed by Tata Consultancy Services at Rs 15.58 trillion, the BSE data shows.

 

HDFC Bank is a leading private sector bank with consistent growth and operational performance over various cycles. Post merger, the bank has become the second largest in terms of size with diversified portfolio. The bank has maintained superior return ratios resulting in premium valuations. HDFC Bank is largest private sector bank with loan book of Rs 24 trillion.

 

Since October 20, HDFC Bank has surged 9 per cent after the lender reported better-than-expected July-September quarter (Q2) results for the financial year 2024-25 (FY25). The BSE Sensex has dropped 1.2 per cent during the same period.

 

The management plans to bring back the credit-deposit ratio (C/D) to the pre-merger level of 86 per cent-87 per cent within two to three years, faster than initially planned (4-5 years) by calibrating loan growth, particularly in larger ticket sizes. The bank is strategically positioning itself to capture future growth opportunities by accelerating the reduction of its loan-to-deposit ratio.

 

While focus on bringing C/D ratio is seen to cap growth, resilience in terms of asset quality and diverting strength in shoring up liabilities franchise will gradually improve positioning of the bank in the long run, according to analysts at ICICI Securities. The brokerage firm maintains a 'Hold' rating on HDFC Bank with a target price of Rs 1,900 per share.

 

HDFC Bank's Q2FY25 performance was marked by stable margins and robust deposit growth, positioning the bank to capitalise on economic improvements and credit growth opportunities through its ongoing efforts to optimise its loan-deposit ratio and gradual replacement of high-cost borrowings, said analysts at Geojit Financial Services in result update.

 

The bank’s future performance is expected to be driven by an enhanced portfolio mix, retail loan mix expansion, leading to improved credit-deposit ratio and steady margins in the medium term. As a result, the brokerage firm said they remain optimistic about the company's long-term growth and reiterated 'BUY' rating on the stock, based on 2.6x FY26E BVPS, with a revised target price of Rs 1,931.

 

Meanwhile, HDB Financial Services, the non-banking finance arm of HDFC Bank, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) of Rs 12,500 crore. Of this amount, HDFC Bank is selling shares worth Rs 10,000 crore through an offer for sale (OFS), while the remaining Rs 2,500 crore will be raised through a fresh issue by the lender. HDFC Bank holds a 94.36 per cent stake in HDB Financial Services. Reserve Bank of India (RBI) guidelines require HDB Financial Services to be listed by September 2025.