HDFC Bank drops on hike in lending rate

The bank made this announcement after trading hours on Friday, 20 June 2007.

Meanwhile, the BSE Sensex was down 146.44 points, or 1.01%, to 14,424.32.

On BSE, 30,346 shares were traded in the counter. The scrip had an average daily volume of 1.1 lakh shares in the past one quarter.

The stock hit a high of Rs 1,100.05 and a low of Rs 1,075 so far during the day. The stock had a 52-week high of Rs 1,825 on 14 January 2008 and a 52 week low of 1,050.30 on 17 August 2007.

India’s second largest private sector bank in terms of net profit had underperformed the market over the past one month till 20 June 2008, declining 20.36% compared to the Sensex’s decline of 13.82%. It had also underperformed the market in the past one quarter, declining 13.47% compared to Sensex’s fall of 2.82%.

The bank has an equity capital of Rs 354.73 crore. Face value per share is Rs 5.

The current price of Rs 1,087.50 discounts its Q4 March 2008 annualised EPS of Rs 53.17, by a PE multiple of 20.45.

The HDFC bank has also upped its deposit rates by 25 basis points across different tenures. The hikes come into effect from 18 June 2008.

Reserve Bank of India on Wednesday, 11 June 2008, hiked repo rate by 25 basis points to 8% with immediate effect in an effort to contain rising inflation. The repo rate is the rate at which Reserve Bank of India (RBI) lends money to banks under its liquidity adjustment facility. The repo rate increase was announced after market hours on Wednesday (11 June 2008) and came outside a scheduled policy review. The repo rate is now at its highest since November 2002.

As per reports, several banks are reviewing their interest rate structures and are expected to take a call soon on whether to raise their rates or not.

HDFC Bank’s net profit rose 37.1% to Rs 471.11 crore on 51% rise in operating income to Rs 3,505.52 crore in Q4 March 2008 over Q4 March 2007.

HDFC Bank is one of the leading private sector banks in India.