Rs 1 lakh-crore loss! HDFC Bank shares record worst day since May 2020
HDFC Bank, which is single-handedly responsible for today's market crash, recorded its worst daily performance since May 2020 by falling around 7.9%. Investors in the bluechip lost around Rs 1 lakh crore as the market capitalisation of the Nifty heavyweight fell below Rs 11.75 lakh crore.
Following the disappointment in December quarter results, several brokerages have reduced their target prices on the stock which led to the downfall.
HDFC Bank's Q3 beat in profit (up 33% YoY to Rs 16,373 crore) was driven mainly by a one-off write-back of Rs 1,500 crore of tax provisions.
«While NIM (calculated) at 3.7% was on the mark, it remained flat sequentially on a low base, a contextual disappointment given faster than expected reduction in balance sheet cash and investments. Yields on interest-earning assets stayed flat QoQ despite (i) the drawdown in balance-sheet liquidity and (ii) a reduction of lower-yield wholesale loans in the loan mix. This was the crux of the disappointment,» said Santanu Chakrabarti of BNP Paribas.
Also read: HDFC Bank shares at mouth-watering valuation, say contra buyers after $10 billion loss
Should you buy or sell HDFC Bank shares?
Going purely by the share price reaction, the mood on Dalal Street is bearish when it comes to the largest private sector lender. However, that is more from a near-term perspective as HDFC Bank remains the top buy for brokerages, both domestic and foreign, for their long-term portfolios.
While trimming earnings for FY25-26 by 2-3% by factoring in lower NIMs, Jefferies has reduced the target price to Rs 2,000 from Rs 2,100 but maintained a buy rating.
Also read: Top 5 factors behind today's market crash
In the analyst call, the company management alluded to
