HDFC Bank: Down 16% so far this year, Bernstein expects nearly 50% rise in the stock in 12 months; here's why

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₹2,000 mark in the next 12 months. The brokerage has an 'outperform' call on the stock with a target price of ₹2,100, indicating a massive upside of around 46 percent from its current market price of ₹1,440. The stock is down almost 8 percent in the last 1 year as against an around 16 percent jump in benchmark Nifty Bank.

It has risen 2.6 percent in March so far after 2 straight months of losses. It shed 4 percent in February and 14.4 percent in January 2024. While benchmarks hit multiple new peaks this year, the same was not the case with this lender.

It hit its record high of ₹1,757.80 on July 3, 2023, and is currently 18 percent away from peak. However, it is up 5.6 percent from its 52-week low of ₹1,363.45, hit last month on February 14, 2024. Read here: Ambuja, Bharti, SBI, L&T, Zomato among top 11 picks by Jefferies for 5 years The recent correction in the stock comes on the back of weak December quarter results and caution amidst investors that the lender's loan growth may come below 10 percent going ahead.

“Is 10 percent a more realistic assumption for HDFCB’s near-term loan growth?" — In the last few weeks, this has been the most common investor question on HDFC Bank. And this question arises from an extrapolation of management’s comments about prioritizing profitability over growth (made during the recent HDFC day event) and also the continued weak deposit growth (vs credit growth)," said the brokerage. As per the brokerage, while the weaker deposit growth has led to more moderate credit growth expectations across the sector, for HDFC Bank in particular, the extrapolation of management’s comments on the usage of incremental deposits (reserve maintenance, eHDFCL liability replacement and growth- in that order)