HDFC Bank has green shoots beyond Q2
HDFC Bank moved lower in a quarterly results development.
· LiveMint Markets
HDFC Bank’s NIM fell to a 12-quarter low in Q2, but core operating profit grew and asset quality improved. Faster growth in higher-yielding loans could help margins recover.
The analysis
Against that, the stock is -2.3% on the day at ₹712.00, and has returned -13.1% over three months. It sits 30% below its 52-week high, which means a good deal of bad news was already in the price. The banks sector has moved -3.3% over the same period, so HDFC Bank is running 9.8 points behind its peers.
This is an Asset quality / margins event. For lenders the headline profit is the least informative line. Slippages, credit cost and margin direction determine whether the quarter is repeatable. On the day the stock is -2.3%, so the market took notice.
For HDFC Bank, the question is how much of this is already reflected in the price and how much re-rates the banks peer set alongside it.
Why it matters
- Earnings versus expectations is what actually re-rates a stock; the surprise matters more than the absolute number.
Market context
- The company directly in focus is HDFCBANK.
- Sector exposure: Banks.
In this story
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