
Muhurat Trading 2024: Why HDFC Bank Shares Are a Smart Buy This Diwali
The Diwali Muhurat Trading session in 2024 is an auspicious time for investors to initiate new investments, particularly in banking stocks. Among them, HDFC Bank has gained significant attention for its discounted price and strong Q2 performance. Experts suggest that this period presents a golden opportunity to invest in HDFC Bank, with the potential for long-term growth. Here’s why HDFC Bank shares are considered a valuable addition to portfolios in Muhurat Trading 2024.
Why Banking Stocks Are Poised for Growth
Banking stocks have recently taken a hit in the Indian stock market, primarily due to a broad-based market correction. However, experts believe that the sector is ripe for a resurgence. Mahesh M. Ojha, AVP of Research at Hensex Securities, points out that the Nifty 50 index is currently range-bound but has created a solid base around the 23,500 mark. In such a market, strategically chosen stocks from the banking sector can offer substantial returns, especially as many are trading at a discount.
Ojha’s Recommendation: “For Muhurat Trading 2024, the banking sector deserves priority. The recent sell-off has rendered several banking stocks undervalued, with HDFC Bank and SBI emerging as top picks. However, HDFC Bank stands out due to its strong fundamentals and growth potential.”
Why HDFC Bank Is the Top Pick
HDFC Bank, India’s largest private-sector lender, reported impressive Q2 results in 2024, exceeding market expectations. While the bank has experienced some net interest margin (NIM) pressure—a challenge faced by the entire banking industry—its profit figures remain robust. According to Manish Chowdhury, Head of Research at StoxBox, the bank’s recent performance and strategic initiatives make it an ideal pick for Muhurat Trading.
Key Factors That Make HDFC Bank Shares Attractive
-
Steady Q2 Performance: In Q2 FY25, HDFC Bank demonstrated resilience by posting profits that exceeded analyst expectations. This performance is especially significant in a market where NIM pressures and competitive deposit rates have posed challenges for many banks.
-
Improving Asset Quality and Profitability: HDFC Bank has seen a slight decline in asset quality, but this is not expected to impact long-term performance. Chowdhury notes that the bank’s management is confident in stabilizing asset quality and improving profitability through strategic loan restructuring.
-
Growth in Retail Deposits and Loan Realignment: HDFC Bank is strategically shifting its loan mix and increasing its focus on retail deposits. This approach is expected to support margin improvement and foster growth, making HDFC Bank a sound choice for long-term investors.
-
Attractive Valuation: HDFC Bank’s current share price is trading at a discount, offering an attractive entry point for investors during the Muhurat Trading session. The recent market correction has made this high-quality stock even more affordable, positioning it as a potential outperformer in the coming years.
Outlook for HDFC Bank and the Banking Sector
Experts agree that banking stocks, particularly HDFC Bank, are poised for a rebound as the market stabilizes. The broader banking sector’s performance is expected to improve, driven by favorable economic policies, increasing loan demand, and better risk management practices. For HDFC Bank specifically, the emphasis on retail deposits and adjustments in the loan mix should help optimize its lending-deposit ratio (LDR) and ultimately enhance profitability.
Final Thoughts: Why HDFC Bank Is a Strong Buy This Diwali
Investing in HDFC Bank during the Muhurat Trading session could be a prudent choice for those looking to take advantage of current market conditions. With a discounted valuation, a strong performance in Q2, and strategic initiatives in place to support growth, HDFC Bank is well-positioned to deliver returns in the long term. As a stable, high-quality stock in the banking sector, it holds significant potential for those seeking a mix of growth and resilience in their portfolio.
Recent Comments: