HDFC Bank shares hit 52-week high on loan growth optimism post RBI rate cut

Shares of HDFC Bank Ltd rose 2.33 per cent in Friday's trade to hit their one-year high of Rs 1,996.30. Today's uptick came after the Reserve Bank of India (RBI) slashed repo (lending) rate by 50 basis points (bps) to 5.5 per cent. The Reserve Bank has cumulatively reduced the repo rate by 100 bps since its February monetary policy review.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, believes that the RBI's monetary policy easing will likely benefit HDFC Bank by supporting the expansion of its credit loan book. He advised long-term investors to continue holding the stock and suggested that fresh buying could be considered on price dips.

On technical setup, immediate support on the counter could be seen at Rs 1,950 level.

Ravi Singh, Senior Vice-President of Retail Research at Religare Broking, said the private lender's scrip could rise to an upside target of Rs 2,050, which would act as an immediate resistance. He advised placing a stop loss at Rs 1,950.

Jigar S Patel, Senior Manager (Technical Research Analyst at Anand Rathi), suggested support on the counter will be at Rs 1,950 and resistance at Rs 2,000. "A decisive move above Rs 2,000 level may trigger a further upside towards Rs 2,050. The expected trading range will be between Rs 1,900 and Rs 2,050 for the short term," he added.

The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 65.32. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-earnings (P/E) ratio of 22.93 against a price-to-book (P/B) value of 3.30. Earnings per share (EPS) stood at 86.57 with a return on equity (RoE) of 14.39. According to Trendlyne data, HDFC Bank has a one-year beta of 0.9, indicating low volatility.