Trend Tracker: HDFC Bank fails to emerge among top Nifty performers during 4 FII bull runs

Foreign Institutional Investors’ (FII) darling HDFC Bank has failed to be a part of the top 20 Nifty performers during last four periods of FII outperformance, even though banks act as safe bets, according to a recent report.

The data indicates an uptick in FII holding in the stock from 32.10% to 32.24% in March 2023.

“In the FII buying periods in banks - June 2003 to October 2007, April 2009 to December 2010, January 2012 to April 2015 and May 2020 to March 2021 - the NSE PSU Index has acted as a classic defensive. The index outperformed two periods of FII selling, while it underperformed in all the four periods of FII buying," IIFL securities said in a report.


It further added that private banks generally tend to do well on FII inflow sprints, but not even once in the 4 FII bull runs did HDFC Bank figure in the top 20.


In the recent FII buying period of May 2020 to March 2021, FIIs bought $37 billion worth of shares while Nifty50 rose 56.7% during the period.

In the given period, only IndusInd Bank was able to bag a position in the top 20 Nifty performers list while FII favourite HDFC Bank has failed to make it to this list during these four periods.

Shares of HDFC Bank have rallied 22% in the last one year and 78% in the last three years.

The private sector bank reported a nearly 20% year-on-year (YoY) rise in net profit for the quarter ended March of FY23 to Rs 12,047 crore. Total income grew 31% on year to Rs 53,851 crore. Net interest income, which is the difference between interest earned and interest expended, grew by 24% on year to Rs 23,352 crore for the quarter ended March.


Other major private banks - ICICI Bank, Axis Bank and Kotak Bank - were left out of the list. The sector outperformance in that bull run was a mere 0.5%, according to the report.

Meanwhile, regular outperformers during FII inflow periods include Axis Bank, Bajaj Finance, IndusInd Bank, Jindal Steel & Power, Mahindra & Mahindra, Tata Motors & Tata Steel.

While, underperformers during FII inflow periods were Bharti Airtel, Britannia Industries, HPCL, HUL, IOCL, NALCO, NTPC, PNB & Shipping Corp.


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