HDFC Bank ADR Shoots Up after Q4 Updates – Brokrages Upgrade the Stock

HDFC Bank released its Q4 Updates and the market was happy about the numbers what they say, this comes after between January and February the stock fell as much as 18% in a few trading sessions citing the NIMs contraction with the bank and when the latest updates of the bank came in market rallied by nearly 3% taking the Nifty 50 index along with it.

Q4 Update and ADR Euphoria

HDFC Bank’s gross advances grew by 55.4% to Rs.25.08 lakh crore in FY24 against ₹16.4 lakh crore in FY23, deposits for the same period stood at ₹23.8 lakh crore in FY24, up 26.5% from ₹18.8 lakh crore in FY23. The growth in advances and deposits showed a huge positive sign for the investors suggesting that the bank might be on the recovery in FY25. The CASA ratio was at 38.2%, a growth of 37.7% QoQ and up by 44.4% YoY.

All positive numbers indicated a strong position and despite that, we saw the FII holding fall to 47.8% against 52.3% in the last quarter, an FII holding cut of 4.5% at the same time Mutual Funds have increased their holdings by 3.72% reaching 23.17% of the holdings from 19.45%. Domestic sentiments with HDFC Bank seemed greater than the FIIs but not enough to keep HDFC Bank ADR from rallying.

The HDFC Bank ADR rallied by nearly 7% on the New York Stock Exchange (NYSE) reaching nearly $70, following this the deposit performance has attracted positive nod from various international brokerages who are bullish to see a 34% upside in the stock.

HDFC Bank Climbs

HDFC Bank on NSE following NYSE’s suit saw a gain of 1.25% as brokerages like Morgan Stanley, Nomura, Macquarie, Citi, Jefferies and HSBC have all upgraded the stock. The sentiments have turned on HDFC Bank and the heavyweight stock has given returns of amost 8% in just one week. 

Conclusion:

After the positive cues from Q4 updates the markets await for the HDFC Bank results, there’s high expectations with the results and a target miss of even 25 bps in NIMs could falter with the expectations and market sentiments.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.