HDFC Bank Stock Shows Strong Momentum, Analysts Bullish on Future Growth

HDFC Bank, India’s largest private sector bank, is currently experiencing a significant surge in its stock value. The stock closed at ₹1,767.70 per share on Wednesday, reaching an all-time high. On 4th July, the share price touched the 52-week peak in a bullish market session.

The MSDI Emerging Market Index is expected to double the weight of leading private sector banks, which is fueling the impressive growth in HDFC Bank shares. The bank’s foreign portfolio investor (FII) holdings have dropped below the 55% limit set by global index providers.

According to official disclosures, HDFC Bank’s ADR rose by 4.48% to $66.97, a significant overnight increase. As of June 2024, the foreign investor holding in the bank stands at 54.83%, down from 55.54% in the previous quarter.

Analysts are optimistic about the future prospects of HDFC Bank shares. With expectations of HDFC Bank’s weight in the MSCI India index increasing, a potential 4-6% rise in stock value is anticipated.

UBS has recommended buying HDFC Bank stock with a target price of ₹1,900, while Jefferies has issued a ‘buy’ rating with a target price of ₹1,880 per share. Despite a lackluster performance over the past year, the stock has shown a remarkable 12% surge in the last month.

The decrease in shareholder holdings is expected to boost HDFC Bank’s weight in the MSCI Index, possibly leading to significant inflows of $300-400 million. The MSCI announcement is due on August 13th, with adjustments taking place on August 30th.