HDFC Bank shares hit new 52-week high on stock upgrade by CLSA

HDFC Bank shares rose to a new 52-week-high of Rs 1,315.55 apiece on Thursday on the Bombay Stock Exchange (BSE) after a brokerage upgraded the stock, based on its earnings potential in the coming few years. The stock closed at Rs 1,307.65, up 1.15 percent. The BSE Bankex ended 1.49 percent higher, while the BSE Sensex gained 265 points to close at 28,773.

CLSA upgraded the stock to Rs 1,420 based on its current account, savings account (CASA) and digital banking initiatives that will drive long-term growth for the private sector lender, The Economic Times said, citing a note by the brokerage. 

The bank's CASA ratio stood at 40 percent at the end of the June 2016 quarter.

Besides, two of the bank's subsidiaries — HDB Financial Services and HDFC Securities — that accounted for about 5 percent of the lender's consolidated net profit are growing at a healthy pace, according to the brokerage.

For the year 2015-16, HDB Financial Services saw a 52 percent rise in net profit to Rs 534 crore on total income of Rs 3,302 crore on a year-on-year basis. HDFC Securities reported net profit of Rs 133 crore on total income of Rs 401 crore. 

For the quarter-ended June 2016, HDFC Bank had reported 21.8 percent rise in standalone net profit of Rs 3,238.9 crore on total income of Rs 7,781.4 crore. Its gross non-performing assets (NPAs) and net NPAs stood at 1.04 percent and 0.32 percent, respectively.

Retail loans constituted 47 percent of Rs 4,70,622 crore as of June 30, 2016.