HDFC Share Price: The stock market is facing a major downturn due to the Russia-Ukraine war and other reasons. The impact of this fall has been very bad on the shares of Housing Development Finance Corp (HDFC). HDFC shares are selling continuously due to Russia-Ukraine war. As a result of this, HDFC shares have broken 22% from their 52-week high level.
Why are HDFC shares falling after all?
HDFC had released the December quarter results on February 2. Since then, its shares have continued to decline. So is the fall in the company’s results or is it just a coincidence?
If we look at the December quarter results, HDFC’s net profit has increased by 11% to $32.6 billion. This was due to higher earnings and lower than expected credit losses.
During this period the net interest income (NII) of the bank increased by 7% to $ 42.8 billion. There was a slight deterioration in the asset quality of the bank as its total loans became NPAs. When the EMI of a loan is delayed for more than 90 days then it is considered as NPA.
When the company’s business is good, the reason for the decline of its shares can be attributed to the Russo-Ukraine war.
According to Mint, HDFC does not have direct investments in any country that is embroiled in a war. Its focus is on the domestic market only.
If geopolitical tension is also not the reason for this decline, then what is the reason for it?
Is this the reason for the decline?
The US Fed Reserve decided to increase the rate in March this year. Since then, foreign investors are taking money out of the Indian market and investing it in their market. Due to this also the selling in HDFC shares has increased.
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Selling by foreign investors has had an impact on the entire market sentiment. The more foreign institutional investors (FIIs) are selling, the more the stocks are getting negatively affected.
Foreign investors have sold not only in HDFC, but also in ICICI Bank and Infosys. In the current situation, the shares have fallen due to sell-off. In such a situation, investors can buy HDFC shares from a long-term perspective. Due to the fall in the shares of the company, it has come to an attractive level.
HDFC also has a better track record in terms of dividend distribution. Its last 4 dividends have been 1000% of the face value.
This article is not investment advice. This is a translation of an article by Equitymaster.com.
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