HDFC Bank crosses ₹6 trillion market cap mark as shares hit record high

Mumbai: India's most valued lender HDFC Bank Ltd crossed the ₹6 trillion market capitalisation for the first time on Wednesday, making it only the country's third firm to achieve the milestone.

Intra-day, the stock touched a fresh record high of ₹2,233 on the BSE, up 2.87% from its previous close. The scrip closed at ₹2,226.10 on the BSE, up 2.56%, with a market capitalisation of ₹6.06 trillion. The Sensex rose 0.58% to end at 37,752.17 points.

HDFC Bank's stock gained for the fifth session in a row, rising as much as 6% during the period. Year-to-date, it has advanced 5%.

Tata Consultancy Services Ltd (TCS) and Reliance Industries Ltd (RIL) are the other two companies that crossed the market capitalisation of ₹6 trillion. RIL remained the most-valued company with a market value of ₹8.54 trillion, followed by TCS with a market value of ₹7.51 trillion.

HDFC Bank’s steady 20% profit growth quarter-after-quarter as well as its immunity to the bad loans crisis have helped the stock. Investors continued to remain buyers in the stock due to its healthy asset quality, superior deposit franchise credit underwriting and structurally better net interest margin.

But asset quality of the bank has deteriorated marginally over the last three years on account of cyclical trends in its agri-loan portfolio, patchy monsoon and farm loan waivers announced by various state governments.

The recent liquidity crisis, however, has not dented its portfolio. HDFC Bank's management has reviewed its existing NBFC portfolio and believes that the portfolio is well-positioned. It does not see an immediate concern on any exposure.

Among the analysts covering the HDFC Bank stock, 50 have a “buy" rating, three have a “hold" rating, while one has a “sell" rating, according to Bloomberg data.

In intraday trade, HDFC Bank shares rose 2.62% to a record high of ₹2,227.40 apiece on the BSE. At 1.30pm, the scrip was trading at ₹2,224.40, imparting the private sector lender a market cap of ₹6.06 trillion.

The benchmark Sensex was trading 0.35% higher at 37,667.48 points.

The HDFC Bank stock has gained for the fifth session in a row, rising as much as 6% in this period. Year to date, it has advanced 4.8%.

HDFC Bank’s steady 20% profit growth quarter-after-quarter as well as its immunity to the bad loans crisis has helped the stock. Investors continued to remain buyers in the stock due to its healthy asset quality, superior deposit franchise credit underwriting and structurally better net interest margin.

But asset quality of the bank has deteriorated marginally over the last three years on account of cyclical trends in its agri-loan portfolio, patchy monsoon and farm loan waivers announced by various state governments.

The recent liquidity crisis, however, has not dented its portfolio.

HDFC Bank's management has reviewed its existing NBFC portfolio and believes that the portfolio is well-positioned. It does not see an immediate concern on any exposure.

Among the analysts covering the HDFC Bank stock, 50 have a “buy" rating, three have a “hold" rating, while one has a “sell" rating, according to Bloomberg data.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.