HDFC Bank (NYSE:HDB) Shares Gap Down – Should You Sell?

Shares of HDFC Bank Limited (NYSE:HDB) gapped down prior to trading on Monday . The stock had previously closed at $26.38, but opened at $24.76. HDFC Bank shares last traded at $23.9480, with a volume of 4,287,527 shares changing hands.

HDFC Bank News Summary

Here are the key news stories impacting HDFC Bank this week:

• Positive Sentiment: HDFC Bank reported strong operating growth in Q1, with revenue of $9.01 billion and profit up 4.98% year over year, supported by healthy interest income growth and continued loan/deposit expansion. HDFC Bank Q1 profit rises 4.98% to $1.97b as on interest income growth
• Positive Sentiment: Some commentary suggests investors may be overreacting, with analysts pointing to HDFC Bank as a possible “buy the dip” opportunity after the selloff. India’s private-sector banks sold off on NIM fears. Ignore the panic and buy the dip in HDFC stock here
• Neutral Sentiment: The bank’s earnings beat on revenue was offset by a small EPS miss versus expectations, which likely contributed to the mixed market reaction. HDFC Bank earnings report and conference call
• Negative Sentiment: Investors were disappointed by narrowing net interest margins and softer core income trends, which overshadowed the bank’s modest profit growth and drove the stock lower. HDFC Bank ADR Drops as Margin Compression Overshadows Quarterly Growth
• Negative Sentiment: A securities-fraud investigation was announced, creating an additional headline risk for HDB and adding to investor caution. Securities Fraud Investigation Into HDFC Bank Limited (HDB) Announced

Wall Street Analyst Weigh In

Several research analysts have issued reports on the company. Weiss Ratings raised HDFC Bank from a “sell (d+)” rating to a “hold (c-)” rating in a report on Monday. Wall Street Zen downgraded HDFC Bank from a “hold” rating to a “sell” rating in a report on Saturday. Finally, Zacks Research upgraded shares of HDFC Bank from a “strong sell” rating to a “hold” rating in a report on Friday, July 17th. Two research analysts have rated the stock with a Hold rating, Based on data from MarketBeat.com, HDFC Bank currently has an average rating of “Hold”.

HDFC Bank Trading Up 0.7%

The company’s 50-day moving average is $24.90 and its 200-day moving average is $27.92. The firm has a market cap of $121.29 billion, a price-to-earnings ratio of 13.99, a price-to-earnings-growth ratio of 1.10 and a beta of 0.64.

HDFC Bank (NYSE:HDB) last posted its earnings results on Saturday, July 18th. The bank reported $0.40 earnings per share for the quarter, topping analysts’ consensus estimates of $0.38 by $0.02. HDFC Bank had a net margin of 15.96% and a return on equity of 13.14%. The firm had revenue of $9.01 billion for the quarter, compared to analysts’ expectations of $5 billion. Equities research analysts forecast that HDFC Bank Limited will post 1.69 EPS for the current year.

Insider Buying and Selling at HDFC Bank

In other HDFC Bank news, insider Ashish Parthasarthy sold 5,600 shares of the company’s stock in a transaction on Tuesday, April 28th. The shares were sold at an average price of $8.70, for a total transaction of $48,720.00. Following the sale, the insider owned 842,958 shares of the company’s stock, valued at approximately $7,333,734.60. This represents a 0.66% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, insider N Srinivasan sold 10,000 shares of the firm’s stock in a transaction that occurred on Thursday, May 7th. The stock was sold at an average price of $8.72, for a total transaction of $87,200.00. Following the sale, the insider directly owned 638,422 shares of the company’s stock, valued at approximately $5,567,039.84. This trade represents a 1.54% decrease in their position. The SEC filing for this sale provides additional information. 1.00% of the stock is owned by insiders.

Institutional Investors Weigh In On HDFC Bank

A number of hedge funds have recently made changes to their positions in HDB. Principal Financial Group Inc. lifted its position in shares of HDFC Bank by 16,808.5% during the first quarter. Principal Financial Group Inc. now owns 17,977,844 shares of the bank’s stock worth $447,289,000 after acquiring an additional 17,871,520 shares in the last quarter. Royal Bank of Canada grew its stake in shares of HDFC Bank by 31.0% during the fourth quarter. Royal Bank of Canada now owns 39,897,767 shares of the bank’s stock valued at $1,457,865,000 after buying an additional 9,451,992 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its stake in shares of HDFC Bank by 9,866.5% during the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 7,944,403 shares of the bank’s stock valued at $271,381,000 after purchasing an additional 7,864,692 shares during the period. Wellington Management Group LLP boosted its position in HDFC Bank by 94.3% during the 3rd quarter. Wellington Management Group LLP now owns 13,155,196 shares of the bank’s stock valued at $449,381,000 after buying an additional 6,386,002 shares during the period. Finally, Invesco Ltd. grew its stake in shares of HDFC Bank by 98.3% in the third quarter. Invesco Ltd. now owns 12,338,006 shares of the bank’s stock worth $421,466,000 after purchasing an additional 6,115,797 shares during the last quarter. 17.61% of the stock is currently owned by institutional investors.

About HDFC Bank

HDFC Bank Limited is one of India’s leading private sector banks, headquartered in Mumbai. Incorporated in 1994 and promoted by Housing Development Finance Corporation (HDFC), the bank provides a full range of banking and financial services to retail, small and medium-sized enterprises, and corporate customers. It is publicly listed and also accessible to international investors through American Depositary Receipts (ADRs) trading on the New York Stock Exchange under the symbol HDB.

The bank’s core activities include retail banking (deposit accounts, personal loans, home loans, auto loans, and credit cards), commercial and corporate banking (working capital finance, term lending, trade finance and treasury services), and transaction banking (cash management and payment solutions).