HDFC Bank, Yes Bank, IndusInd Bank hit lifetime highs

Shares of three private sector banks – HDFC Bank, Yes Bank and IndusInd Bank – touched their lifetime highs on the National Stock Exchange (NSE) in an otherwise rangebound market.

Post robust January-March (Q4FY16) quarter earnings, all these three banks have been outperforming the market by gaining between 4% and 7% as compared to less than 1% rise in the Nifty.

HDFC Bank hit a lifetime high of Rs 1,137, extending its 3% up move in past three trading sessions. The bank reported a 20% growth in net profit, on back of a strong 24% jump in net interest income for the Q4FY16.

Strong growth, stable net interest margins, strong growth in core fees, strong sequential rebound in CASA are the key earnings highlight of HDFC Bank, according to IDFC Securities.

The brokerage house reiterates its outperform rating on the stock with target price of Rs 1,280, given the bank’s strong retail franchise which becomes even more valuable in the current environment of high corporate stress.

JP Morgan overweight on the stock with price target of Rs 1,300 as foreign brokerage house see it as a growth stock and believe premium valuations will continue to be supported by its superior earnings quality, fortress balance sheet and continued EPSg momentum.

Yes Bank has moved higher to its record high of Rs 948, up 3.4%, extending its previous day’s nearly 1% gain on the NSE.

Antique Stock Broking maintain ‘Buy’ rating on the stock with a target price of Rs 1,085, saying an improving retail liability franchise, Tier-I at 10.9%, sustainable loan growth and scope for margin expansion places YES Bank in the driving seat to participate aggressively in the next credit cycle.

IndusInd Bank too hit a lifetime high of Rs 1,049 on the NSE in early morning trade, surging 6.5% since April 21, after the bank reported a strong 25% year-on-year (yoy) jump in net profit at Rs 620 crore in Q4YF16 on back of 37% YoY growth in its net interest income (interest earned minus interest expended).

HDFC Securities has maintained a ‘buy’ rating on the stock with target price of Rs 1,073.

“IndusInd Bank offers best-in-class business metrics and strong earnings visibility (28% PAT CAGR over FY16-18E). With stable operating metrics, solid asset quality and continued build-up in leverage, we estimate RoAAs to inch up to around 2% by FY18E vs. 1.86% in FY16,” HDFC Securities said in results preview.