HDFC Bank (HDB) Pops on Vote of Confidence from Analysts

Jacob Harper |

As the Indian economy continues struggling to right slowing growth and spiraling inflation, an influential Indian analyst cited HDFC Bank Ltd. (HDB) as the “safest play” in the country’s financial sector, citing their asset quality and extremely strong net interest margins.

In an interview with CNBC-TV18, Ajay Bodke of Prabhudas Liadher praised HDFC above all the other major banks in India, with ICICI Bank Limited (IBN) being his second pick among the large caps. In a separate interview with the same station that day, Dhananjay Sinha of Emkay Gloibal Financial Services told the same station that he liked both HDFC and ICICI for being structurally sound.

HDFC has been looking to tap into the underserved rural Indian market, saying on Oct 4 they expected grow revenues from its present rate of 15 percent to 50 percent in five years. Many rural residents, especially women, are currently underbanked or unbanked. HDFC Managing Director Aditya Puri says the bank’s goal is to bring 5 million currently underserved customers into their system.

ICICI as well has worked to move into the untapped rural market in an innovative mobile banking strategy. In September the bank introduced a “bank on wheels” specifically designed to serve this market, whose residents often live in difficult-to-access areas.

Like many aspects of the Indian financial sector, HDFC has had a rough year. Its shares have shed over 20 percent of their value in 2013, as the country struggles to overcome inflation, outdated corporate regulations, and dwindling foreign investments.

The bank rose on the vote of confidence from analysts and aggressive rural banking strategy. HDFC gained 3.06 percent to hit $32.97 a share. ICICI rose 2.98 percent to hit $31.41 a share.

 

(image courtesy of WIkimedia Commons)

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Companies

Symbol Name Price Change % Volume
HDB HDFC Bank Limited 63.06 -0.87 -1.36 585,106
IBN ICICI Bank Limited 7.68 0.10 1.32 5,364,730
RNECF Renesas Electronics Corp 7.28 0.00 0.00 0

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