InvestorQ : Is HDFC Bank worth a buy after the latest March 2020 quarter results?
Niti Shenoi made post

Is HDFC Bank worth a buy after the latest March 2020 quarter results?

Answer
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5 months ago


I would recommend considering both fundamental and technical while making an investment decision as being a retail investor one has access to past data rather than information about expected future performance of the company.

The Q4FY2020 results are okay but can't be considered as good/exceptional and the true impact of COVID-19 will be seen in Q1FY2021 and price may correct further in the coming months until things turn well for the economy as a whole. One more interesting point worth considering is the PE of the stock is less when compared to peers and that's usually not a sign of strength for the stock with the bank being most credible should normally command higher PE when compared to peers but that's not the case and the street might be unaware of the real scenario that's coming. Short term trading bounces are possible towards 1020 levels. On a technical perspective if the stock starts trading above 1020 levels on a monthly basis then it can be bought for medium term time frame of 1-2 years.


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Archita Jajjoo answered.
5 months ago


The results of HDFC Bank have actually been quite flattering with Q4 profits rising by 18% to Rs.6928 crore. Even the NII grew by 16% although the COVID impact should be more visible only in the next quarter. Profits were slightly lower than the street estimates. The net interest margins (NIMs) of the bank still stood at a healthy 4.3%. Advances and deposits of the bank have grown by over 20%. Contrary to general perception, the Gross NPAs actually fell from 1.42% to 1.26%. Clearly, these numbers make a strong case for buying into the stock lower levels. While risks may still be there, these price levels surely give you a degree of comfort.