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Udaipur Mirror, 20 September 2023
Shares of HDFC Bank, India’s largest private sector bank, fell by nearly 3% on Wednesday, 20 September 2023, the most among the Sensex and Nifty50 components. The stock closed at Rs. 1,629.05 on the BSE, down 3.18% from the previous close.
The decline in HDFC Bank’s share price is attributed to a number of factors, including:
- Disappointing loan growth figures: HDFC Bank’s loan growth slowed to 14% in the first quarter of FY24, compared to 18% in the same period last year. This is lower than the company’s own guidance of 16-18%.
- Rising interest rates: The Reserve Bank of India (RBI) has raised interest rates three times in a row since May 2023, in an effort to combat inflation. This is likely to put pressure on HDFC Bank’s margins, as the company will have to pay higher interest rates on its deposits.
- Weak corporate loan growth: HDFC Bank’s corporate loan book grew by only 11% in the first quarter of FY24, compared to 20% in the same period last year. This is due to a slowdown in the Indian economy and the ongoing war in Ukraine.
Despite the recent decline in its share price, HDFC Bank remains a well-managed company with a strong track record. Analysts are still bullish on the stock, and believe that it is a good long-term investment.
In an interview with Udaipur Mirror, Mr. Santosh Meena, Head of Research at Axis Securities, said that the recent decline in HDFC Bank’s share price is a buying opportunity for investors. “We believe that the company is well-positioned to benefit from the long-term growth of the Indian economy and the banking sector,” he said.
Mr. Meena also added that the company’s strong balance sheet and its diversified portfolio will help it to weather the current challenges.
Investors who are looking to invest in the Indian banking sector should consider HDFC Bank as a long-term investment.