Will RBI curbs hurt HDFC Bank stock?

Mumbai: Shares of HDFC Bank slid 1.8 per cent per cent at Rs 1,377.05 on Thursday as analysts said the impact of Reserve Bank of India's directive to the bank to stop issuing new credit cards as well as the launch of new digital business could be modest.The central bank's order has come after a rise in the number of outages of its online services.While shares of the bank — a stock market darling for the past decade — ended near their session lows on Thursday, analysts see this as a temporary setback and have maintained bullish ratings.“...the impact on profitability will only be limited to its ability to issue new cards. Existing credit card book will continue to drive good profits," said Macquarie, which has an outperform rating and target price of Rs 1,489 on the stock. HDFC Bank shares have risen almost 79 per cent from March 23 — when the Nifty hit a four year-low. The Bank Nifty gained 60 per cent in the period.Macquarie said the ban could be in place for around three to six months as the bank would take at least a quarter to resolve some of these issues, after which the regulator will likely relax the restrictions. The biggest challenge for the bank under the new CEO Sashi Jagdishan is to build scale as it already enjoys a 10 per cent market share.Maintaining a buy stance, Edelweiss said this disruption will be short lived and an opportunity to accelerate HDFC Bank’s tech investments. Morgan Stanley has also maintained an overweight stance on the bank with a target price of Rs 1,550.

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