Amid the rout in the stock, no one is talking about the private sector lender’s alarmingly high credit-deposit ratio—a key measure of stability—and the management’s lax approach to the problem.
On 16 January, HDFC Bank announced its results for the December quarter of the ongoing fiscal. The event’s focus was on the private sector lender’s better-than-expected performance on the earnings front.
Brokerages rushed to issue buy recommendations on the stock, setting a price target of over Rs 1,800 a share. Broking firm Prabhudas Lilladher raised it a few notches—Rs 2,000.
What happened the next day, however, dampened all the cheer around the results. The bank’s shares tumbled 8%, setting off a downward spiral that hasn’t seen a respite yet. The following week, BNP Paribas Arbitrage sold 2 million shares of …
Furquan leads the banking coverage at The Morning Context. A business journalist with eight years of experience and a best-selling author, in his earlier stints as a reporter with the Deccan Herald and a columnist at The Banker, he wrote on banking, financial markets and regulatory affairs. He has extensively covered India's debt market crisis, banking crisis and the fall of Yes Bank.
Editor, Banking
furquan@mailtmc.com
Delhi