HDFC Bank's shares slipped about 1% on Thursday, marking a fourth day of losses before its Q3 earnings release on Jan 17.
Why the stock fell
The drop comes after the bank posted a modest 4% decline over the past four sessions. Investors are waiting to see if the bank's earnings will meet expectations.
Quarterly performance snapshot
- Loans grew roughly 9% year‑on‑year, showing steady lending activity.
- Deposits rose around 12% year‑on‑year, with term deposits (time deposits) growing faster than current‑account savings.
- Asset quality remained solid, with lower provisions and slippages expected.
Analysts' expectations
Most analysts expect loan growth of about 2.5% sequentially and a slight dip in net interest margins (NIM) because the fall in loan yields may outpace the reduction in deposit costs. However, fee income is projected to grow faster than loans, and operating expenses should stay in check.
Several brokerages have set price targets near ₹1,170‑₹1,180, implying upside potential of around 20‑23% from the current price.
What could drive future gains
- Continued deposit mobilisation, especially in lower‑cost current‑account savings.
- Improved net interest margins as the bank benefits from lower reserve requirements and deposit repricing.
- Stable asset quality and disciplined cost management.
Bottom line for investors
While the stock faces short‑term pressure ahead of earnings, the bank’s strong loan growth, healthy deposit base, and solid asset quality suggest it could rebound if results are positive. Keep an eye on margin trends and the bank’s ability to sustain deposit growth.
Remember, this is just a perspective, not a prediction. Do your own research before making any investment decisions.