HDFC Bank share price today: Stock tanks 12% in just two days; wipes out Rs 1.3 lakh crore in market capitalisation – Times of India

by The Technical Blogs

HDFC Bank share price today: HDFC Bank shares experienced a significant drop on Thursday, with a decrease of up to 3.7% to the day’s low at Rs 1,480 on the Bombay Stock Exchange. Despite Wednesday’s crash, the bank failed to attract enough dip buyers to recover. Over the past two trading days, the stock has seen a decline of about Rs 1.3 lakh crore in its market capitalization, following a 12% decrease since yesterday.
Today, more than one-third of the decline in the Nifty and Sensex can be attributed to the weak performance of HDFC Bank shares, according to an ET report.At 11:29 AM, shares of HDFC Bank were trading at Rs 1,504.30, down Rs 33 or 2.12% on the Bombay Stock Exchange.
Investor concerns regarding the private sector lender mainly revolve around its flat net interest margin (NIM) on a quarter-on-quarter (QoQ) basis, despite the withdrawal of the ICRR and a significant decrease in the LCR to 110%. The growth of deposits has been lower than expected.Following the sharp correction, Jefferies, a global financial services firm, stated that the valuation of HDFC Bank is now at an interesting level of 2.1x FY25E adj. PB and 14x PE.
Prakhar Sharma of Jefferies mentioned, “Growth in EPS (down 2% YoY in 3Q) that is contingent on NIM expansion will be key to stock moves. For FY25, we see a 16% rise in loans, 17% in deposits & 4QFY25E NIM of 3.55% vs 3.4% now. This drives EPS of Rs 95 with sensitivity to 5bps lower terminal NIM at 1.5-2%. We see PE/EPS based valuation taking prominence & delivery inline with guidance will be key.”
Even though Jefferies has reduced earnings estimates for loan growth and NIMs for FY25-26, it still predicts a decent 16% YoY growth in loans for FY25, a 17% rise in deposits, and a 10bps YoY expansion in NIMs.
Nomura, a global broking firm, has downgraded HDFC Bank stock to a neutral rating and has reduced NIM estimates by 15 bps across FY25-26. The bank faces challenges in terms of funding mix improvement and a longer-term story. As a result, Nomura has cut FY25-26F PAT by ~6% and reduced RoA to 1.7%.

HDFC Bank shares had their worst trading session on Wednesday since the Covid crash in March 2020, ending the session 8.5% lower.
Despite the negative sentiment, there are still some bullish views. CLSA has raised its target price on HDFC Bank to Rs 2,025 from Rs 1,900, while Axis Securities has set a target price of Rs 1,975, up from Rs 1,800. Bernstein has maintained an outperform rating on HDFC Bank with a target price of Rs 2,200.
While a few long-term investors have shown interest in the bank, the near-term outlook remains uncertain.
Param Subramanian of Nomura stated, “For any broader pickup in NIM going ahead, HDFC Bank needs deposit growth to significantly outpace loan growth (in order to reduce wholesale borrowings in funding mix), which is not the current trend and will stay a challenge. This is a key challenge, which makes the road ahead tough, and is driving the cuts to our balance sheet growth and NIM assumptions.”

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