HDFC Bank’s share price has galloped 47% over the last one year, outstripping benchmark indices and even most of its peers. If we put the rising bad loan stock in the context of the loan book, asset quality looks pristine. Compare this with peer performance and HDFC Bank’s stock begins to justify its valuations. The secret sauce to keep bad loan metrics friendly is to simply grow the loan book at a fast clip. This does not mean indiscriminate lending but a smart acquisition of borrowers which HDFC Bank seems to have mastered.

Source: Mint October 24, 2017 14:26 UTC