HDFC Bank’s market capitalisation tops Rs9 trillion as shares hit record high

MUMBAI: HDFC Bank Ltd saw its market capitalisation cross Rs9 trillion on Wednesday, after shares of the lender hit a record high of Rs1,635 apiece in early deals on the BSE.

At 0930am, the scrip traded at Rs1,630 per share, up 1.5% from its previous close while the benchmark Sensex was up 1% at 51300 points. So far this year, the HDFC Bank stock has risen 13.5%.

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With a market cap of Rs9.01 trillion, it is the third company in the country have achieved this milestone.

Billionaire Mukesh Ambani’s Reliance Industries Ltd is India’s most valued firm with a market cap of Rs13.25 trillion, followed by TCS at Rs11.17 trillion.

Shares of HDFC Bank have advanced after the lender reported better than expected December quarter earnings led by improved net interest margins, higher non-interest income and stable asset quality.

Analysts also expect that the bank’s digital initiatives and increasing economic activity will boost retail credit growth. This, coupled with healthy traction in corporate disbursement will keep its business momentum ahead of that of the industry.

HDFC Bank’s net interest income rose 15.1%, while loan growth was 16% and reported an improved NIM of 4.3%. Core fee and commission income increased 26% sequentially, provision expenses were lower at Rs3,414 crore versus Rs3,703 crore a quarter ago while profit grew 16.6% sequentially.

Gross non-performing assets (NPAs) and net NPAs improved 27 basis points and 8 basis points quarter on quarter to 0.8% and 0.1%, respectively, primarily because of the Supreme Court’s standstill on bad loan recognition.

“HDFC Bank continued to report steady and in-line performance amid economic recovery. Despite prudent approach to NPA risk management the bank was able to maintain profitability. HDFC Bank continued to provide adequately towards unrecognized stress due to Supreme Court injunction. HDFCB remains our preferred pick and we believe that it demands a higher valuation in the current uncertain environment, the banking sector is facing,” Karvy Stock Broking had said in a report dated 28 January.

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