HDFC Bank’s share price rose more than 2 percent in the early trade on March 14 after the Reserve Bank of India (RBI) had lifted the restrictions that were placed on the fresh digital launches of HDFC Bank.
“The Reserve Bank of India has lifted the restriction on the business generating activities planned under the HDFC Bank’s Digital 2.0 program, vide its letter dated March 11, 2022,” the bank said in its press release.
The curbs were imposed by the central bank in December 2020 after repeated outages at the lender’s data centre. The restrictions barred HDFC Bank from launching any of the activities planned under the Digital 2.0 programme as well as the sourcing of new credit cards.
The RBI also asked the bank to fix accountability in the matter pertaining to the data centre outages, and examine the reasons behind the lapses.
In August last year, the curbs were partially eased to allow the lender to issue new credit cards. HDFC Bank had, back then, claimed that it issued a record number of credit cards after the restrictions were partially eased.
Check out what brokerages says about the stock and company:
Morgan Stanley
Research house has maintained an overweight rating on the stock with a target at Rs 2,050 per share.
The bank is working on new digital initiatives aside from the ban and expects the bank to roll out new initiatives over the next few quarters.
RBI nod should reduce investor concerns on bank’s digital capabilities and expect it to regain momentum as revenue growth accelerates.
Jefferies
The broking house has kept buy call on the stock with a target at Rs 2,160 per share.
RBI lifting the ban would push the launch of new platforms, even BAU initiatives would get simpler with this clarity from RBI.
The macro headwinds are at play, but key stock-specific overhang is behind now.
Nomura
Research firm has maintained a buy rating with a target at Rs 1,955 per share.
The focus will shift to NII & loan growth.
The negative sentiment from a supervisory oversight ought to finally dissipate. The digital acquisition of customer & wallet share will improve profitability, it added.
At 09:21 hrs, HDFC Bank was quoting at Rs 1,429.70, up Rs 32.70, or 2.34 percent on the BSE.
The share touched a 52-week high of Rs 1,724.30 and a 52-week low of Rs 1,292.00 on October 18, 2021 and March 8, 2022, respectively.
Currently, it is trading 17.09 percent below its 52-week high and 10.66 percent above its 52-week low.