HDFC Bank share price cracks 7% after Q3 results; what should investors do?

livemint.com:

BSE on Wednesday, January 17, a day after the company reported its December quarter results. HDFC Bank share price opened at ₹1,583.85 against its previous close of ₹1,678.95 and soon cracked 6.5 per cent to hit the level of ₹1,570. HDFC Bank on Tuesday reported a 33 per cent jump in its net profit at ₹16,372 crore in Q3 of FY24, as compared to ₹12,259 crore a year ago.

Its net interest income (NII) rose to ₹28,471 crore in Q3 of FY24 from ₹27,385 crore in the previous quarter. The core net interest margin was unchanged sequentially. It rose 3.4 per cent on total assets and 3.6 per cent on interest-earning ones year-on-year.

HDFC Bank’s gross non-performing assets (NPAs) were reported at 1.26 per cent in Q3 of FY24, up from 1.23 per cent last fiscal year. Net NPAs in Q3 of FY24 stood at 0.31 per cent, as compared to 0.33 per cent last year. Also Read: HDFC Bank Q3 results: Net profit jumps 33% at ₹16,372 crore – 8 key highlights A majority of brokerage firms retained their positive views on HDFC Bank after its December quarter earnings.

However, some of them have trimmed their estimates for the short-to-medium term. Motilal Oswal has reiterated its buy rating on HDFC Bank stock with a target price of ₹1,950. The brokerage firm underscored that HDFC Bank reported in-line earnings led by healthy other income and steady loan growth.

Margins stood largely flat (slightly below our expectations) even as the bank deployed excess liquidity and significantly drew down the LCR ratio. Loan growth was healthy driven by growth in retail and continued traction in commercial and rural banking. Asset quality ratios improved while PCR also inched up to nearly 75 per cent, Motilal Oswal pointed out.