HDFC Ltd looks Bullish in Long Term Growth

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HDFC Ltd looks Bullish in Long Term Growth

Long term growth in HDFC Ltd as it portrays Bullish trend

Housing Development Finance Corporation (NS:) Ltd is the leading company in the housing finance industry in India with a market share of more than 40%. With the leadership position in the housing finance industry, the company’s well-established subsidiaries have combined to its growth by providing synergetic growth along with its subsidiaries. The growth of HDFC Ltd has been dynamic as it posted a CAGR of 23.41% over the last 10 years which has been most consistent. Also, the company’s net profit has increased by almost 4 times YoY to Rs. 8,372.5 crore in the last quarter ended December 2019 as it converted its shareholding in Gruh Finance to Bandhan Bank.

The Company’s bullish trend can be observed with the formation of bullish candlesticks which is shown in the below graph. The following graph of the Ichimoku cloud indicator shows the bullish trend in the stock by the formation of the green cloud in an upward trend. The company has been experiencing reversal trends as the impact of COVID-19 has reduced the economic activity in the economy.

Moreover, the company has acquired Apollo Munich Health Insurance Company Ltd which provided with existence for HDFC ERGO Health Insurance Ltd. It is a joint venture between the HDFC Ltd and ERGO International which is a primary insurance entity of the Munich Re Group. With the acquisition, the company has also entered the Health insurance industry which would be a vital strategy in the current situation.

The following chart of Bollinger Bands and pSAR also shows the reversal trend in the stock as the bearish and bullish candlesticks are formed after 2-3 trading day session. Also, the current candlestick being formed has reached its high price which showed an increase of 6% in the share price. The fall in the price of the shares shows the impact of Coronavirus which has disrupted the operations of the company which would last only for a shorter period as the company possesses a strong business model with well-established subsidiaries.

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