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Shares of HDFC Bank can provide 26% return; bank reports 19.9 per cent jump in Q3 results

HDFC Bank Stock Price: Shares of the top private sector bank are soaring right now. The stock reached Rs 1621 today after increasing by approximately 1.5 percent intraday. whereas on Friday, it was closed at Rs 1601. The market was pleased with the bank’s presentation of the financial results for the December quarter on Saturday. The asset quality has also improved if the bank’s profit has increased by 19%. Following the outcomes, brokerage firms are also urging customers to purchase this stock in the banking industry. The stock has increased 6% in a year and 65% during a five-year period.

Quarterly profit

With a target price of Rs 1930, brokerage firm Motilal Oswal has urged investors to purchase HDFC Bank shares. There is a potential for a 21% return on the present price of Rs 1600. According to the brokerage firm, HDFC Bank’s quarterly earnings met expectations. Core PPoP and NII have increased in size. The margin is steady. Due to a boost from the retail category, loan growth has been robust. Commercial and rural banking have both experienced strong development.

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26% profit on return

While Yes Securities has advised to purchase with a target of Rs 2020, brokerage house JM Financial has advised to invest in HDFC Bank with a target of Rs 1840. ICICI Securities, a brokerage firm, has advised purchasing the stock with a target price of Rs 1,601. ICICI Securities, a brokerage firm, has advised investment with a goal of Rs 1920. You can receive a 26% return on the stock if you look at the target price of Rs 2020 in this case.

Bank’s earnings will continue

Brokerage house Motilal Oswal said that the asset quality of the bank is improving, the restructuring book has moderated. The provisioning buffer is sustaining asset quality and the PCR is in good health. The brokerage forecasts that the bank would have a CAGR growth of 19 per cent in PAT during FY22-25. RoA/RoE in FY25 may be 2%/17.7%.

Profit up by 19% in December quarter

In the three months ended in December 2022, HDFC Bank’s profit climbed by 18.5 percent to Rs 12,259.5 crore. While the bank made Rs 10,342.2 crore in profits during the same quarter of the prior fiscal year. In the bank’s Net Interest Income (NII), there has been a 25% increase. The annual income on a standalone basis increased over this time from Rs 40,651.60 crore to Rs 51,207.61 crore.

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Rise in the bank’s asset quality

In terms of asset quality, the current financial year’s December quarter saw no change in the Gross Non-Performing Assets (NPA) of HDFC Bank, which held steady at 1.23%. Additionally, Net NPA dropped from 0.37 to 0.33 percent. In comparison to the same quarter a year ago, the bank’s provision and contingencies were at Rs 2,994 crore. They were now at Rs 2,806.4 crore. The bank’s core net interest margin on total assets and interest-earning assets was 4.1% and 4.3%, respectively.

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