A Value Pick
The Hindu Business Line|March 30, 2020
While there could be near-term challenges, the RBI’s recent measures and the bank’s strong financials offer comfort
Radhika Merwin
A Value Pick

It has been a hellish past month for the Indian stock market.

Investor wealth has eroded sharply, with many large-cap stocks also falling like ninepins and recording multi-year lows.

In this market mayhem, banking and finance stocks have been the worst hit, with marquee names also coming under intense selling pressure.

HDFC Bank, one of the most resilient stocks backed by sound financial performance in recent years (amid multiple challenges in the banking sector), was among the bluechip stocks that took it on the chin over the past month.

At its lowest point, the stock lost 35 per cent in March alone; though the recent rebound in the market has helped recoup some of the losses.

However, the stock is still down 23 per cent since the beginning of March.

Valuations have also corrected sharply from 4.5 times price to-book a year ago to 2.5 times currently.

Is it a good time to stock up HDFC Bank?

Near-term challenges

There are several points that investors need to keep in mind while considering banking and finance stocks now. One, with the Covid-19 threat increasing and impacting growth of businesses in India, the banking sector is likely to witness a sharp slowdown in growth and earnings in the coming quarters.

Two, banks with relatively higher exposure to unsecured consumer loans and SME loans may be more impacted by the ongoing turmoil.

Denne historien er fra March 30, 2020-utgaven av The Hindu Business Line.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra March 30, 2020-utgaven av The Hindu Business Line.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA THE HINDU BUSINESS LINESe alt
Covid Presents An Opportunity For India
The Hindu Business Line

Covid Presents An Opportunity For India

India must attract investors exiting China post-Covid. Streamlining of project clearances and relaxation in FRBM norms will help

time-read
4 mins  |
April 29, 2020
Did Alternative Assets Shield You From Covid-19 Volatility?
The Hindu Business Line

Did Alternative Assets Shield You From Covid-19 Volatility?

The assets closely linked to stock and debt markets could not stave off the losses

time-read
4 mins  |
April 29, 2020
How To Put Aircraft To Bed
The Hindu Business Line

How To Put Aircraft To Bed

Preserving grounded planes, to get them up and flying at short notice, is a challenging task. Ashwini Phadnis captures the process

time-read
5 mins  |
April 29, 2020
There Can Be No Going Back On WFH
The Hindu Business Line

There Can Be No Going Back On WFH

Covid-19 has fast-forwarded the shift to ‘work from home’. However, some face-to-face connect will always be needed

time-read
5 mins  |
April 29, 2020
UN, WHO Urged To Ensure ‘Benefit Sharing' Of Covid-Related Data
The Hindu Business Line

UN, WHO Urged To Ensure ‘Benefit Sharing' Of Covid-Related Data

Biopharma firms should reach vaccines, medicines to poor nations at an affordable price, say civil society bodies

time-read
2 mins  |
April 29, 2020
With No Clear Signal From Rlys, States Explore Ways To Bring Back Migrants
The Hindu Business Line

With No Clear Signal From Rlys, States Explore Ways To Bring Back Migrants

Quarantine centres, cross-country buses being arranged even as migrants hop on to boats, trucks and ambulances

time-read
2 mins  |
April 28, 2020
Centre Allows All Neighbourhood Shops To Open But With Riders
The Hindu Business Line

Centre Allows All Neighbourhood Shops To Open But With Riders

Final call will be taken by local authorities; shopping complexes that draw fewer ‘outsiders’ are permitted to operate

time-read
2 mins  |
April 28, 2020
Covid Impact Relatively Muted In India
The Hindu Business Line

Covid Impact Relatively Muted In India

Compared to Italy and the US, India’s rate of infection spread has been slow. This can be attributed to the strict measures in place

time-read
4 mins  |
April 28, 2020
How Global Trade Will Fare Post-Covid
The Hindu Business Line

How Global Trade Will Fare Post-Covid

China isn’t likely to lose its pre-eminent position soon. India, for one, will need to make manufacturing globally competitive

time-read
4 mins  |
April 28, 2020
How To Curb Harassment In The Virtual Office
The Hindu Business Line

How To Curb Harassment In The Virtual Office

Training and sensitisation are essential. Institute a strict dress code and chat etiquette to ensure professionalism during video calls

time-read
3 mins  |
April 28, 2020