HDFC Bank shares jump over two percent to hit three-month high

HDFC Bank shares jumped over two percent to reach a three-month high on the stock exchange. The stock price touched 815 rupees after crossing the 800-rupee mark in the previous trading session. On October 28 of this year, the share price had dropped to its 52-week low of 668.90 rupees. Since that low point, the stock has gained 21 percent in value. Around 10 am on the trading day, the stock rose 2.36 percent to trade at 814.90 rupees on the BSE, pushing the bank's market capitalisation past 12.5 lakh crore rupees.

Market Indicators

The Relative Strength Index value stands at 74.4, which places the banking stock in an overbought position on technical charts since any reading above 70 signals an overbought state. The overall trend for the stock remains bullish. Furthermore, the share is currently trading above its simple moving averages across 10, 20, 30, 50, 100, 150, and 200 days.

Brokerage Targets

Brokerage firm JM Financial raised its target price for the bank from 800 rupees to 850 rupees and upgraded its rating from 'ADD' to 'BUY' due to strong asset quality and attractive valuations following recent price dips. The firm noted that a low liquidity coverage ratio of 113 percent and a high credit-deposit ratio of 96 percent might create short-term growth hurdles, but it maintains an optimistic outlook for net interest margin recovery in the medium term. Meanwhile, Motilal Oswal fixed a target price of 925 rupees for HDFC Bank while raising its earnings estimates for financial years 2027 and 2028 by up to 3.5 percent. Motilal Oswal estimates the return on assets for financial year 2028 at 1.74 percent and the return on equity at 14.1 percent.

Context

Major banking stocks in India often see significant price movements driven by technical indicators and brokerage upgrades. Analysts track key metrics like the credit-deposit ratio and net interest margins to gauge the lending health and profitability of major financial institutions. Share prices fluctuate regularly based on broader market sentiment and quarterly financial estimates provided by expert research firms.