Are HDFC Bank shares gearing for an ITC moment?

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Stocks to watch: ITC share price remained in ₹190 to ₹250 apiece range from ₹190 to ₹220 per share levls during November 2020 to February 2022. However, after coming out of this base building moce, ITC share price has ascended to the tune ₹450 apiece levels in last 19 months, delivering around 105 per cent return in this time. So, ITC shares are one of the multibagger stocks that Indian stock market has delivered in recent years.

Looking at HDFC Bank shares, this Nifty heavy weight has been trading in ₹1500 to ₹1700 range for near one year, even though market is highly bullish on HDFC Bank shares in this period, especially after HDFC Bank and HDFC merger. Experts believe that fundamentals of the bank have remained strong throughout this period and post-merger, it has managed to improve its CASA, which may further improve. apart from this, HDFC Bank's NPA ratio is one of the lowest among Indian banks, which is attracting foreign institutional investors (FIIs).

However, they said that lending business of the company is under pressure after Indian government introduced bad loan regime to address the NPA issue of PSU banks. Now, big PSU banks like State Bank of India (SBI), Bank of Baroda (BoB), Canara Bank, Punjab National Bank (PNB), etc. are giving tough challenge to HDFC Bank's lending business.

Apart from this, HDFC Bank will have to maintain is ALM (Asset Liability Management) post-HDFC Bank and HDFC merger. So, it may take some time for the HDFC Bank shares to come out of the base building mode, but once it picks momentume, there can be sharp upside movement in this Nifty 50 stock. Till then, HDFC Bank shares can be termed as gearing for an ITc moment.