Shares of HDFC Bank rallied nearly 4 percent on Monday after the bank reported a sharp increase in advances and deposits in the quarter ended June 2020. The stock gained as much as 3.97 percent to Rs 1,116.85 per share on the BSE. At 10:50 am, the shares traded 3.29 percent higher, quoting at Rs 1,109.50 apiece.

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The bank reported 21 percent growth in advances to Rs 10,04,500 crore as of June 30, 2020, as compared to Rs 8,29,700 crore as of June 30, 2019. The bank’s advances as on March 31, 2020, were at Rs 9,93,700 crore.

The private sector lender’s deposits aggregated to approximately Rs 11,89,500 crore during Q1FY21, a growth of around 25 percent as compared to Rs 9,54,600 crore, YoY. The deposits stood at Rs 11,47,500 crore as of March 31, 2020, the bank said in its quarterly update to the exchanges.

The bank’s CASA ratio during the quarter under review stood at around 40 percent as compared to 39.7 percent, YoY and 42.2 percent, QoQ.

The lender said that during the quarter it purchased loans aggregating Rs 1,376 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited.

Brokerage CLSA maintained Buy rating on the stock with a target price of Rs 1,250 per share.

“Positive loan growth in Q1FY21 is a surprise given system overall/retail growth dipped by 1.2 percent/3 percent. With weak OEM sales and a fall in credit card spending we expect retail growth to have slowed down for HDFC Bank as well and incremental growth to have be driven by corporate credit (a similar trend to FY20),” CLSA said in a note.

The brokerage noted that while higher growth in any segment in the current scenario could be risky, HDFC Bank’s incremental risk-weight consumption was very low in FY20 indicating lending to best private/PSU credit and banker consolidation by the top corporates.

Morgan Stanley maintained an Overweight rating with a target at Rs 1,285 per share and believes that the bank’s Q1 updates imply continued market share gains.

It said that strong growth implies further acceleration in corporate banking.

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First Published:Jul 6, 2020 11:14 AM IST