Currently, the stocks pundits have a very bullish outlook for the market. They predict that economy will pick up and the markets will cover from previous year’s crashes. Further, the companies are announcing their results, which could result in earnings growth. However, on the flip side, the share prices may not rise as per the growth since the market is still to correct the current high valuations.
Hence, the investors are being advised to exercise caution while buying shares. Their focus should be on stocks which have had maintained a consistent track record in spite of volatility and bearish trends. One such stock is of HDFC Bank. Currently, it is the largest bank in India as per the market capitalization. The HDFC stock price has experienced the highest valuation in both domestic and international markets several times over. It has been growing at over 30% for many years. Today, HDFC Bank commands one of the most premium shares and high PE multiples in the market.
The bank’s market valuation began to rise after its current Managing Director Aditya Puri took over the reins in 1994. Since then, HDFC share price has maintained consistent profitability even during the toughest times. Some of the reasons why HDFC Bank stocks make a good buy are its good management, low Net NPA ratio, loan to deposit ratio, excellent growth in EPS, dividend and profit, and profitable return on equity.
Between 2004 and 2016, HDFC stock price appreciated by whopping 2700% from Rs50 to Rs1300. In 2017 too, it remained on the soaring spree from around Rs1200 in January to Rs1800 in December. Since January 2018, the HDFC share price has fluctuated, but never went below Rs1800 and touched the highest price of this year has been Rs2042 as on May 29.
As per the figures on March 2018, the bank has a network of 4787 branches across 2691 cities. Recently, it opened its 100th bank in Bihar which indicates that the company has an optimistic outlook on its expansion plans. In alignment with ‘Digital India’ vision of the ruling government, HDFC has shifted its focus to making its products, services and interfaces digital. On 30th May, 2018, the bank announced that it had allotted 6324000 equity shares to the employees of the bank as per its exercise of options under its Employees Stock Options Schemes (ESOS). With this move, its paid up share capital will increase from Rs5193951334 equity shares of Rs 2 each to Rs5206599334 equity shares of Rs 2 each.
HDFC Bank has made its shareholders happy with its returns over the years. Its shares are worth investing for investors who have a long-term outlook.
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