Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> is one of those few stocks that were nearly unaffected by the recent market turmoil (-5.7% pullback, peak to bottom and now at new highs).</li>
<li>
<a href="https://www.smartkarma.com/insights/time-to-buy-hdfc-bank-hdfcb-in" target="_blank" rel="noopener">Our insight in January 14th 2025</a> signaled a strong buy opportunity, the stock rallied +13% from there.</li>
<li>Now the stock has reached its previous all time highs, and may become overbought. Long-term outlook remains positive, but a short-term pullback is possible in the next 2 weeks.</li>
</ul>



HDFC Bank (HDFCB IN) is one of those few stocks that were nearly unaffected by the recent market turmoil (-5.7% pullback, peak to bottom and now at new highs).

Our insight in January 14th 2025 signaled a strong buy opportunity, the stock rallied +13% from there.
Now the stock has reached its previous all time highs, and may become overbought. Long-term outlook remains positive, but a short-term pullback is possible in the next 2 weeks.


Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


-------------
Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>Deposit growth has been decent and exceeded loan growth, allowing HDFCB to bring down its credit-deposit ratio. Average deposits grew 15%+ YoY, while loans grew at 7%+ YoY in Q3FY25.</li>
<li>Despite tough macro environment, HDFCB was able to gain market share in deposits. Despite headwinds from tight liquidity leading to competitive pricing, HDFCB was able to maintain its NIM.</li>
<li>HDFCB is benefitting from its productivity and technology-led enhancements with costs growing at just 7% YoY. Despite weak macro-economic environment, HDFCB's asset quality has remained pristine, barring seasonality in Agri-loans.</li>
</ul>


Deposit growth has been decent and exceeded loan growth, allowing HDFCB to bring down its credit-deposit ratio. Average deposits grew 15%+ YoY, while loans grew at 7%+ YoY in Q3FY25.
Despite tough macro environment, HDFCB was able to gain market share in deposits. Despite headwinds from tight liquidity leading to competitive pricing, HDFCB was able to maintain its NIM.
HDFCB is benefitting from its productivity and technology-led enhancements with costs growing at just 7% YoY. Despite weak macro-economic environment, HDFCB's asset quality has remained pristine, barring seasonality in Agri-loans.


HDFC Bank (HDFCB): Robust Deposit Growth Despite Tough Environment

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Foreign shareholding in <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> has dropped to 54.83% and that results in foreign room crossing the 'magical' 25% mark.</li>
<li>The increase in foreign room could lead to passive trackers of a global index needing to buy 256m shares (US$5.3bn; 11.5x ADV) at the end of August.</li>
<li>There will definitely be positioning in the stock but there should still be upside in the stock. The <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd" target="_blank" data-smartkarma-citation="entities:559:1" rel="noopener">HDFC Bank (ADR) (HDB US)</a> line was up 4.5% overnight.</li>
</ul>


Foreign shareholding in HDFC Bank (HDFCB IN) has dropped to 54.83% and that results in foreign room crossing the 'magical' 25% mark.
The increase in foreign room could lead to passive trackers of a global index needing to buy 256m shares (US$5.3bn; 11.5x ADV) at the end of August.
There will definitely be positioning in the stock but there should still be upside in the stock. The HDFC Bank (ADR) (HDB US) line was up 4.5% overnight.


HDFC Bank (HDFCB IN): Foreign Room Crosses 25%; Index Implications & Positioning for US$5bn+ Buying

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>A long-short strategy with <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a>, <a href="https://www.smartkarma.com/entities/icici-bank-ltd" target="_blank" data-smartkarma-citation="entities:547:1" rel="noopener">ICICI Bank</a>, and <a href="https://www.smartkarma.com/entities/state-bank-of-india" target="_blank" data-smartkarma-citation="entities:160:1" rel="noopener">State Bank Of India</a> outperformed the <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank Index</a> by 2.1% from 21 November to present.</li>
<li>The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.</li>
<li>The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.</li>
</ul>


A long-short strategy with HDFC Bank, ICICI Bank, and State Bank Of India outperformed the NSE Nifty Bank Index by 2.1% from 21 November to present.
The trade is supported by strong fundamentals, institutional and systemic aspects, and favorable technical factors.
The strategy is market-neutral with zero correlation to the Nifty Bank Index, enhanced by the yield pick-up from shorting the futures in a contango market.


Banking on Success: A Long-Short Strategy for Nifty Banks

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899" rel="noopener">Hang Seng Index (HSI INDEX)</a>, <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY)</a> and <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909" rel="noopener">Nikkei 225 (NKY INDEX)</a> all have elevated implied vols vs their peers and vs historical observations for October.</li>
<li>
<a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617" rel="noopener">NIFTY Index (NIFTY INDEX)</a> , <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886" rel="noopener">S&amp;P 500 INDEX (SPX INDEX)</a> and <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a>  implied vols are on the low end of what is typically realized in October.</li>
<li>Most markets see price weakness in the 3rd week of the month with realized volatility underperforming over the back half of the month.</li>
</ul>



Hang Seng Index (HSI INDEX), Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY) and Nikkei 225 (NKY INDEX) all have elevated implied vols vs their peers and vs historical observations for October.

NIFTY Index (NIFTY INDEX) , S&amp;P 500 INDEX (SPX INDEX) and S&amp;P/ASX 200 (AS51 INDEX)  implied vols are on the low end of what is typically realized in October.
Most markets see price weakness in the 3rd week of the month with realized volatility underperforming over the back half of the month.


EQD | Asia Monthly Vol Roadmap: Elevated IV's in CSI300 and Hang Seng Present Tactical Opportunity

India

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

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HDFC Bank (HDFCB IN)

Time to Sell HDFC Bank? Stock Nears Record High and Slightly Overbought

HDFC Bank stock has remained resilient amid market turmoil, reaching previous all time highs on April 15, but the the odds for a short-term...

Nico Rosti

HDFC Bank (HDFCB): Robust Deposit Growth Despite Tough Environment

Despite high competitive intensity, HDFCB has seen strong deposits growth. Its post-merger liquidity and credit-deposit metrics have come into...

Ankit Agrawal, CFA