Bernstein maintained an outperform rating on HDFC Bank with a target price of Rs 2,200 but highlighted the top 3 concerns behind the $13 billion rout.
HDFC Bank shares slumped more than 8% on Wednesday - its biggest single-day drop since March 2020 - as concerns over the bank's future profitability triggered a sharp sell-off.
The biggest concern is on the drivers for the net interest margin (NIM) surprise and the lack of a clear pathway to normalization.
A continued weak deposit growth could limit loan growth and/or eat into margins.
Improvement in operating metrics of the bank now appears to be more dependent on the operating environment rather than an automatic even if a gradual improvement story.
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