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HDFC Bank Shares Rebound, Experts See Gradual Long-Term Recovery Ahead
HDFC Bank shares have recently started rising after falling for a long time.
The stock gained more than 4% in September, even though the broader Sensex market index declined.
Some experts think this could be a good time to buy for the long term.
They say the bank’s basic business remains healthy and the share price is relatively inexpensive.
Other concerns include pressure on profit margins, slower loan-to-deposit improvement and uncertainty about future leadership.
Technical analysts also see signs that the price could recover.
They consider ₹680 an important support level.
If the share price rises above certain resistance levels, it could move higher.
However, experts expect any recovery to happen gradually rather than suddenly.
HDFC Bank shares have gained more than 4% in September, while the Sensex has fallen nearly 3%.
The stock closed at ₹740 on 21 September after hitting a 52-week low of ₹682 on 11 September.
Analysts cite loan-to-deposit normalization, net interest margin pressure and leadership concerns as key factors behind the decline.
Religare Broking and Ventura recommend long-term accumulation, citing valuations, core fundamentals and potential earnings improvement.
Technical analysts identify support near ₹680 and project possible upside toward ₹800–₹820 if resistance levels are cleared.
- Who
- HDFC Bank, its domestic and foreign institutional investors, and market analysts.
- What
- HDFC Bank shares have rebounded in September after a prolonged decline, prompting analysts to assess whether investors should accumulate the stock.
- Where
- The shares trade on the Indian stock market; the report references BSE data and the Sensex.
- When
- The rebound was reported in September, with the stock closing at ₹740 on 21 September after reaching a 52-week low on 11 September.
- Why
- Analysts attribute the recent interest to relatively attractive valuation, healthy core fundamentals, technical support and expectations of improved deposits, margins and earnings.
Bullish Long-Term View
Cautious Recovery View
Investment timing
Bullish Long-Term View
Analysts at Religare Broking and Ventura said the stock is suitable for long-term accumulation because negative factors may already be reflected in the price.
Cautious Recovery View
The stock has delivered negative returns across the reported five-year, three-year, two-year, one-year and year-to-date periods, so investors remain cautious.
Recovery outlook
Bullish Long-Term View
Technical and fundamental analysts see potential upside toward ₹800–₹820, supported by bullish RSI divergence, hammer candlesticks and expectations of margin stabilization.
Cautious Recovery View
Religare Broking’s Ajit Mishra does not expect an outright strong reversal and expects the recovery to be gradual.
Key risks
Bullish Long-Term View
Supporters point to healthy asset quality, resilient profitability, core fundamentals and relatively lower valuation than some large private-sector peers.
Cautious Recovery View
Concerns remain over the pace of loan-to-deposit normalization, near-term net interest margin compression and uncertainty surrounding the next chief executive.
Key facts
- September performance
- HDFC Bank shares were up more than 4% in September.
- 21 September close
- The stock rose 1.49% to close at ₹740.
- 52-week range
- The stock reached a 52-week low of ₹682 on 11 September and a 52-week high of ₹1,020.35 on 23 October of the previous year.
- Long-term performance
- The stock was down 4.5% over five years, 4.7% over three years, 15% over two years, 23.5% over one year and 25.3% year-to-date.
- Institutional ownership
- Domestic institutions held 41.92% and foreign portfolio investors held 41.83% at the end of the June quarter of FY27.
- Valuation
- HDFC Bank traded at nearly 2.5 times price-to-book and around 14 times earnings.
- Technical levels
- Analysts identified ₹680 as crucial support and projected potential targets between ₹760 and ₹820.
Quotes
Vinit Bolinjkar
Head of research at Ventura
“The stock was impacted by margin challenges, which weighed on earnings. There were also governance-related concerns, particularly around the appointment of the next CEO. These factors had an impact on earnings and the overall sentiment. With most of these negatives already priced in, and with greater clarity emerging on the possible course of action, we have a buy recommendation on the stock for the long term.”
livemint.com
“One should buy the stock now. With the stock trading near multi-quarter lows and core fundamentals intact, the risk-reward favours accumulation for investors with a 12-18 month horizon, as continued deposit mobilisation, CASA recovery, and NIM stabilisation should support a gradual re-rating.”
livemint.com
Sources
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