Global brokerage firm Bank of America downgraded the 'HDFC Bank' from a "buy" rating to a "neutral." HDFC Bank shares fell by almost a percent to Rs 1,622 a share on July 10.

The reduction follows the incredible rise from the low points in February, when investors became cautious about HDFC Bank's deficient deposit statistics following its merger with the former HDFC.

The stock of HDFC Bank rallied over 19 per cent from its February lows, partially due to index-weight optimism. Looking ahead, Bank of America analysts anticipate that the stock's risk-reward ratio will remain within a narrow range.

Business update

A soft business update for the June-ended quarter (Q1 FY25) was recently shared by HDFC Bank. The deposit base of the private sector lender increased by 24.4 percent year over year to Rs 23.8 lakh crore in Q1, but sequentially it remained unchanged. With the effects of the merger taken out, deposits increased by 16.5 per cent in the previous 12 months.

HDFC bank results

The largest private lender in India saw its stock fall more than 4 per cent so far this year, trailing the benchmark Nifty 50, which gained 11 per cent in the same time frame.

However, the lender's gross advances increased by 15 per cent year over year when the merger impact was taken out and by 52.6 percent on an annual basis to Rs 16.3 lakh crore.

The bank's advances under management increased by 54.1 percent on average, from Rs 16 lakh crore in the June 2023 quarter to Rs 25 lakh crore in the June 2024 quarter.

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Prior to this, on July 3, 2024, HDFC Bank reached a 52-week high of Rs 1,791 per share, driven by expectations of seeing its weight in the MSCI EM index rise.

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