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HDFC Bank| Why should investors bet on HDFC Bank despite the underperformance ?

HDFC bank, known for its consistency, delivered earnings growth of 30% YoY every quarter for a very long period and that moderated to 20% YoY in the past few years. And precisely for this consistency in the performance across credit cycles, HDFC bank enjoyed the premium valuation. However, the merger has weighed on the HDFC bank’s stock performance. The Street seems to be extrapolating near-term merger hiccups to future years.Given the bank’s track record and execution capabilities, HDFC Bank can positively surprise the Street on earnings growth albeit in the next fiscal which can lead to a valuation re-rating and stock upside. Investors should use the current consolidation in the stock price to accumulate the stock.

October 24, 2024 / 09:19 IST
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first published: Oct 24, 2024 09:19 am

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