Will HDFC Bank touch its all-time high in October?

HDFC Bank has been the leader of the banking pack for a while now, creating huge wealth for the investors. The company’s stock has jumped by nearly 20 per cent since the end of September.

In 2020, HDFC Bank is the only bank from the group of large private banks trading close to its pre-covid prices. The stock has recovered by nearly 60 per cent from its March lows and is trading only 7 per cent below its all-time highs. It is estimated that the results declared by HDFC Bank may surprise investors positively. With stellar results expected and some positive momentum seen in the banking counters, it may not be difficult for the bellwether banking stock to touch its all-time high.

Nonetheless, banks seem to be underperforming in 2020, after investors expected banks to be pressured with NPAs, delayed loan repayments, and piling up of debts or in general poor financial strength.

BSE IT index is up by 43 per cent and BSE Healthcare index is up by 49 per cent on a YTD basis. There are signs emerging of technology and pharma stocks being overvalued and some value emerging in the banking stocks. Hence, there is a case for some buying interest in banks in the near future.

Along with HDFC bank, analysts expect ICICI Bank to report a stellar set of numbers, owing to a low base effect.