HDFC Bank share price underperforms Sensex post-merger; what should you do?
HDFC Bank have been witnessing some profit booking in July so far after they witnessed a decent gain of about 6 per cent in June ahead of the merger of HDFC with it. In July so far, the stock is down nearly 2 per cent against a 2 per cent gain in equity benchmark Sensex. However, most analysts and brokerage firms remain upbeat about the stock for the medium to long term as they believe the merger of HDFC and HDFC Bank is synergistic.
HDFC merged with and into HDFC Bank on July 1, 2023. On July 5, HDFC Bank shared its June quarter's business updates and said the merged entity’s gross advances aggregated to approximately ₹2,245 crore as of June 30, 2023, up 13.1 per cent over ₹1,985.9 crore as of June 30, 2022, and growth of around 0.7 per cent over ₹2,230.2 crore as of March 31, 2023. The merged entity’s gross advances, excluding wholesale advances of HDFC, aggregated to approximately ₹2,136.5 crore as of June 30, 2023, a growth of around 15.3 per cent over ₹1,852.2 crore as of June 30, 2022, and growth of around 1.3 per cent over ₹2,109.7 crore as of March 31, 2023, the bank said in its BSE filing.
Besides, the merged entity’s deposits aggregated to approximately ₹2,063.5 crore as of June 30, 2023, up 16.2 per cent over ₹1,776 crore as of June 30, 2022, and a growth of 1.2 per cent over ₹2,039.4 crore as of March 31, 2023. Most analysts and brokerage firms are positive about the prospects of HDFC Bank. Recently, global financial firm Morgan Stanley resumed coverage on the stock with an 'overweight' view with a target price of ₹2,110, implying a 26 per cent upside.
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