HDFC Bank share analysis | top 5 weightage stocks in Nifty50

HDFC Bank Ltd.
HDFC Bank
HDFC Bank


HDFC Bank is a stock which can control the Nifty 50 on its own. It can increase the Nifty or it can also decrease the Nifty because in Nifty 50 this stock has a weightage of over 10% and this is the biggest weightage given to any stock in the Nifty 50 as you can see I have given the top 5 Nifty 50 stocks which have the highest weightage.
  1. HDFC Bank Ltd.–10.42%
  2. Reliance Industries Ltd.–10.06%
  3. Housing Development Finance Corporation Ltd.–7.88%
  4. Infosys Ltd.–6.56%
  5. ICICI Bank Ltd.–5.85%

This means the 10% value of Nifty 50 depends on the HDFC Bank's performance.
The reason behind telling you all this is that today on Sat-18th of Apr the Q4 Results of HDFC Bank are officially declared.

And in these results the Bank claims that they have gained a 17.7 percent year-on-year (YoY) growth in the net profits (PBT) of the bank at Rs. 6,927.7 crores. And the tax on the revenue is Rs. 2246 crores.

Many big predictors and brokerage institutions predicted that HDFC Bank will have a 20 percent profit growth in the net profits, but HDFC missed that mark by 2 percent. In this statement of brokerage institutions, HDFC Bank replied that they should've made a profit of additional Rs. 450 crores by improving their money collecting services but because of the lockdown in the ending of the March they could not do that.

The Net Interest Income (NII) of the bank climbed up to 15,204 crore from Rs 13,089 crore 
caused by the 21.3 percent growth in the Advances and a huge 24.7 percent growth in the deposits, this means they have more cash balance which they can use to earn some interest by giving loans and which will again increase the profits of the next Quarter.

The Gross NPA of the bank is lowered from 1.42 percent to 1.26 percent as compared to the last quarter which is very good news for the bank because already this bank has the lowest NPA's in the Banking sector.

The Bank reported that there is a doubling of provisions and contingencies from Rs. 1889.2 crores to Rs. 3784.5 crores in the Q4, which is bad news for the bank. But these provisions and contingencies would be shifted for the next quarter, but the bank wanted to show the reality during the fallen market which is a good sign for the stock because in the next quarter the bank will have less provision and contingencies.

The pre-provision operating profits (PPOP) of the bank also increased at a rate of 19.2 percent to Rs. 12958.8 crores.

The Credit cost ratio also came to 0.77% from 0.92 percent in the December quarter.
 Since the biggest private lender HDFC Bank said that the company future improvements will tell that the company will be affected from this pandemic or not.

HDFC Bank has announced no dividend payouts for the equity shareholders.

Since RBI has asked the private sector banks to not give any dividend payouts as to use that money to recover the losses which are occurred to the banking sector which is a good step by RBI.
And this RBI's action will also make an understanding in the investors of HDFC Bank about dividend payout.

Conclusion:

I think HDFC Bank will be a good stock to invest in it under 900 because the results are consistent from many years and is also the leading bank in the banking sector. And its predicted that if HDFC Bank makes a jump of 100 points, then Nifty 50 will also be pushed up because of its higher weightage in Nifty 50, tell me in the comments you agree or not with this and if you have any suggestion, then let me know in the comments. Thankyou for reading my blog.

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