 "HDFC Bank")
Shares of HDFC Bank advanced 3.2 per cent to Rs 1,529.85 on the BSE in Thursday's intraday trade after the lender reported a healthy deposit growth, on a quarterly basis, in the March quarter.
The stock closed 3 per cent higher at Rs 1,528 apiece as against 0.47 per cent rise in the benchmark S&P BSE Sensex index.
In its quarterly business update, the bank said its total deposits stood at Rs 23.8 trillion at the end of the March quarter, clocking a growth of 26.4 per cent year-on-year (Y-o-Y) and 7.5 per cent quarter-on-quarter (Q-o-Q).
Of this, retail deposits grew by around 27.8 per cent Y-o-Y and around 6.9 per cent Q-o-Q, while wholesale deposits grew by around 19.4 per cent on year and around 10.9 per cent sequentially.
Slow deposit growth has been a key overhang for the stock in recent quarters. During the December quarter, it had reported deposit growth of 1.9 per cent Q-o-Q and loan growth of 4.9 per cent Q-o-Q. This pushed its loan-to-deposit ratio above 100 per cent at 110 per cent.
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Prior to its merger with HDFC Ltd, LDR stood at ~85 per cent. Historically, too, HDFC Bank's LDR ratio for had been in the range of 85-87 per cent. Adjusting for merger related adjustments, LDR stood at 89 per cent for the lender in Q3FY24.
"The bank's intention of driving deposit growth through branch addition is tough to execute given slow pace of branch addition (270 branches in the financial year so far compared with the intended 1,500 for the full year) and new branch locations being focused mainly outside Tier 1 centres (and hence, with low deposit potential)," analysts at YES Securities had pointed out in their Q3 result review report, while maintaining 'less-than-bullish ADD' on the stock with a target price of Rs 2,000.
Those at Nirmal Bang, however, expected LDR ratio to improve over a period of time supported by deposit growth rate outpacing advances growth (by ~300-400bps).
Meanwhile, gross advances in the recently concluded quarter stood at Rs 25.08 trillion as of March 31, 2024, clocking a growth of around 55.4 per cent Y-o-Y and around 1.6 per cent Q-o-Q.
"Grossing up for transfers through inter-bank participation certificates and bills rediscounted, the Bank's advances grew by around 53.8 per cent over March 31, 2023 and around 1.9 per cent over December 31, 2023," it said in a statement.
Domestic retail loans grew by around 108.9 per cent over March 31, 2023 and around 3.7 per cent over December 31, 2023, while commercial & rural banking loans grew by around 24.6 per cent on year and around 4.2 per cent over the December quarter. Corporate and other wholesale loans (excluding non-individual loans of the erstwhile HDFC Limited) grew by around 4.1 per cent Y-o-Y, but slipped 2.2 per cent over the December quarter.
The bank's CASA deposits aggregated to approximately Rs 9.09 trillion as of March 31, 2024,up 8.7 per cent over Rs 8.36 trillion at the end of the March quarter of FY23, and around 8.8 per cent over Rs 8.35 trillion as of December 31, 2023.
Retail CASA increased by 8.8 per cent Y-o-Y and 6.3 per cent Q-o-Q. Overall, HDFC Bank's CASA ratio stood at around 38.2 per cent as of March 31, 2024 vs 44.4 per cent as of March 31, 2023 and 37.7 per cent as of December 31, 2023.
Tech View on HDFC Bank stock
With today's gap-up, the stock of HDFC Bank is testing the 100-day moving average of Rs 1,522 level, shows the daily chart. It has also moved out of the upper end of the Bollinger Band, placed at Rs 1,493 level.
While the momentum indicators exhibit bullish outlook, the stock is testing the overnought zone on the 14-day RSI indicator. Thus, the upmove, from here on, could be gradual. The next resistance for the stock is placed at Rs 1,558, its 200-DMA.
On the weekly chart, the 100-WMA (Rs 1,541) and 50-WMA (Rs 1,567) are the key resistance zones.
Immediate support for the stock, meanwhile, is placed at Rs 1,453, its 20-DMA.
