HDFC Bank stock rises 5% post Q1 earnings; time to buy, sell or hold?

Shares of HDFC Bank were trading as top gainers on Nifty and Sensex on Monday after the private lender said it plans to raise up to Rs 50,000 crore through bonds to enhance capital base to fund its business growth.

HDFC stock price has gained 4.8% in one week and 9.55% in one month.

HDFC Bank share price opened with a gain of 3.9% today and later touched an intraday high of Rs 1152.65, rising 4.87% against the earlier close of Rs 1,099.15 on BSE. The stock also touched a low of Rs 1,124.65.

HDFC Bank share is trading higher than 5, 20, 50, 100 and 200-day moving averages. HDFC Bank stock has risen 7.85% in the last 3 days of straight gains.

Total market capitalisation of the lender stood at Rs 6,21,691.69 crore as of today's session.

"Approval of shareholders was obtained for the issue of Unsecured Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and Long Term Bonds (financing of infrastructure and affordable housing) on a private placement basis of an amount in aggregate not exceeding Rs 50,000 crores," the lender said in a regulatory filing.

The approval by the lender's board was given at the 26th Annual General Meeting of the bank concluded on Saturday

In another update, lender's Managing Director and Chief Executive Officer Aditya Puri, without revealing the name of the candidate said that that his preferred successor is an internal candidate who has spent 25 years at the lender. HDFC Bank had earlier selected the names of internal candidates Sashidhar Jagdishan and Kaizad Bharucha, and Citi's Sunil Garg as the probable candidates.

"He (the successor) has been with us for 25 years, my successor was always in place, at least in my mind, it is up to the RBI now to decide among what we have given to them.." Puri told shareholders at the bank's virtual AGM held on July 18.

The private lender's profit during Q1 FY21 increased sharply to Rs 6,658.62 crore compared to Rs 5,568.16 crore in the same period last year. Net interest income in Q1 FY21 gained 17.8% YoY to Rs 15,665.42 crore.

Kotak Institutional Equities said in its note that the lender reported weak revenue growth offset by cost controls, with provisions remaining high as expected. It added," HDFC Bank reported 20% yoy earnings growth on the back of 15% yoy operating profit growth. Loan growth was impressive at ~20% yoy but led by non-retail. The bank's earnings have strong levers, which we see this quarter as a reflection of this thesis. A positive outcome on credit costs would help maintain its premium, in our view. Maintain 'ADD' rating with Fair Value unchanged (Rs1,200)."

Broking house Nomura said it is confident about the company's ability to navigate the current crisis and expects the bank to gain market share. The brokerage rated the stock 'Buy' with a target price at Rs 1,325 per share.

Britannia Industries share price hits all-time high post Q1 earnings

Stocks in news: HDFC Bank, Canara Bank, Muthoot Finance, Vodafone Idea, YES Bank