The best stocks for swing trading this week 8 is HDFC Bank Ltd. It is the cheapest blue chip stock available at its lowest valuation of all time.
To put it simply, the company’s price-to-earnings ratio, or PE ratio, is 16.1, which is the lowest since the stock’s first offering to the public. Both swing traders and long-term investors have a fantastic opportunity to invest in this stock. Because of this, this Bluechip stock is included in our radar this week
A few important points about HDFC BANK to look out for:
- In the near future, HDFC Bank might see an upside move of 25% to 50% based on our tried and true swing trading methods.
- HDFC Bank Ltd. released its best-ever quarterly results, with a remarkable revenue increase of 44% to 78,008 Cr and a 30% upside growth in net profit to 17,718 Cr. The stock is currently trading at its lowest valuation even though the company is achieving its best-ever profits.
- These kinds of chances, where you may purchase India’s major bank’s stock at the lowest valuation ever, are extremely uncommon in the stock market.
Note – The information is for education purposes only. We are not a SEBI-registered advisory. Please consult your financial advisor before trading or investing money in the stock market.
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To Study further Let’s dive into some basic information about the company and its Fundamentals and Technicals Analysis –
HDFC Bank Ltd.
One of the first companies to receive the Reserve Bank of India’s (RBI) “in principle” approval to open a private sector bank was the Housing Development Finance Corporation Limited (HDFC). Originally created as “HDFC Bank Limited,” HDFC Bank is a publicly traded financial institution with its headquarters located in Mumbai, India. It was established in August 1994. It provides a range of financial and banking services, such as treasury management, retail, and wholesale banking. As of September 30, 2020, HDFC Ltd. owned a 19.32% ownership in the company, which is promoting it. The largest private-sector bank in India at the moment is HDFC Bank Ltd. (HBL).
HDFC Bank was the first bank in India to develop an International Debit Card in partnership with VISA (VISA Electron), and it also issued the MasterCard Maestro debit card.
KEY POINTS
a) Segment revenue
Treasury – 14%
Retail banking – 46%
Wholesale banking – 27%
Other banking operations – 13%
b) Location-wise breakup
Domestic – 99%
International – 1%
C) PAN India Presence
There were 21,683 banking locations across India as of FY22, including Branches (6342), Business Correspondents (15,431), ATMs/Cash Deposits, and Withdrawal Machines (18,130).
d) Key Ratios – FY22
Capital Adequacy Ratio – 18.9%
Net Interest Margin – 3.89%
Gross NPA – 1.17%
Net NPA – 0.32%
CASA Ratio – 48%
Cost to Income ratio – 38.3%
e) Leadership in the Payments business
In India’s payment ecosystem, HDFC is a major player. An HDFC Bank-issued card accounts for one out of every three rupees spent in India on credit cards.
In total, 1.45 crore credit cards and 3.21 crore debit cards have been issued by them.
In India, they presently have more than 17 lakh merchant acceptance locations for purchases. Being the source of more than half of all electronic card volumes, they hold a significant market share.
f) Leadership in the country
The second-biggest direct tax collector is HDFC Bank.
60% market share makes it the leader in middle-market banking.
among the biggest banking networks in India’s rural and semi-urban areas.
With a strong presence in the financing of passenger cars, trucks, and motorcycles, HDFC Bank is still a market leader in the auto finance industry.
Fundamentals of HDFC Bank Ltd.
( For a better understanding of fundamentals you can visit screener.in )
| HDFC Bank Ltd. Fundamentals |
|---|
| Market Cap – ₹ 10,82,864 Cr. |
| Stock P/E – 15.9 |
| Current Price – ₹ 1,425 |
| High / Low – ₹ 1,758 / 1,363 |
| Book Value – ₹ 519 |
| Debt to Equity –7.39 |
| Return on Equity – 10 Years – 17% |
| Return on Capital Employed – 10 years – 7.42 %. |
| Compounded Profit Growth – 10 years –21% |
| Stock Price CAGR – 10 years – 14% which is good. |
| Institutions Shareholding Holding – 82% which is very impressive. |
Technical Analysis of HDFC Bank Ltd
As we previously mentioned HDFC Bank Ltd. is currently trading at its lowest value, with a PE ratio of 16.1, and an average (median) PE ratio of 25.5 for the stock. But when looking at it from a pricing perspective, it’s still fairly affordable, as the figure below indicates.
( For a better understanding of charts you can visit tradingview.com )
- Entry – 1600 or lower
- Exit – 1750 (For Swing Traders)
- Exit – 2170 (For Long Term Traders)
There is going to be a 26% gain from the present price if we were to enter at the current price and aim for the lifetime high. That might be our exit from the swing trading perspective.
However, as we mentioned at the beginning, it’s also a fantastic chance for long-term or sensible traders.
Based on our study, the stock price of HDFC Bank Ltd. should provide you with approximately 50% or more in returns during a two-year period, mostly till 2025.
It’s also a perfect opportunity to buy according to our tried and tested MA(Moving Average) Swing Trading Strategy,
Therefore, it makes it the best stock for swing trading this week 8.
Note – The information is for education purposes only. We are not a SEBI-registered advisory. Please consult your financial advisor before trading or investing money in the stock market.
Conclusion
To conclude in short HDFC BANK is the best stock for swing trading this week – 8 As you can see from the above, the company’s foundation looks good. Technically the stock is solid. In terms of profit and revenue generation, the profit is increasing significantly quarter-wise. After our careful analysis, on the basis of the MA ( Moving Average), the swing trading strategy once again proved and gave us an incredible opportunity to invest in this particular stock. So let’s not delay any further and seize this golden chance.
Happy investing !!!
