The company has failed the investors and it seems it still has a long way to go. Aurore also decided to forego the merger offer as the turn around, at that point of time, looked difficult.
And it still looks difficult. Current quarter will also be bad.

Another technical factor is that a majority of funds own HDFC Bank and it is a high allocation for them – having given stellar returns for 2 decades plus.

With the stock struggling, a lot of large cap oriented funds will underperform the Index of they don’t cut allocation to HDFC Bank. This can also be a headwind in the coming year alongwith weaker growth than expected

Dis: Sold before merger

My take on the results
They were slightly disappointing mainly because of the margins, despite exhausting their excess liquidity they margins remained flat

I think this is mainly because of a high liquidity crunch in the system, hdfc being such a large bank cannot get deposit until system liquidity improves, once the casa ratio comes back to 40% margins will improve but I feel it won’t easily go back to 4% plus because of the housing and wholesale loans they’re doing now. That is also not bad because while top like is lower, opex and credit cost will also be lower keeping the bottom line similar

In terms of loan quality there is absolutely nothing to complain about, credit cost is very low and they have such large provision buffers and adjustments that it really won’t be an issue unless something seriously goes wrong.

My feeling is that things will be tight till June, income tax payment and cash withdrawals for elections will take liquidity out of the system and psl requirement for 1/3 of the hdfc book start in April. Post the election the government might start spending and the RBI might inject liquidity into the system, plus the bond inclusion money will come in and then the margins will improve

Despite the low margins they still managed an RoA of 2% and RoE of 15%, income tax write backs were mostly used for provisions. Even if it doesn’t rerate, it should give a steady 15% kind of return once things settle down inline with the RoE

After Green Hydrogen , now it is time for a PLI.scheme for Green Ammonia- Govt announces incentives Scheme to produce-5,50,000 MT of Green-Ammonia

Game plan is clear. Green Ammonia can be easily produced from Green Hydrogen is a versatile chemical with a plethora of utilities.

(1) Ammonia is a liquid at room temp.and can be easily transported / shipped though containers, tankers, pipelines and so can be easily exported to other countries
(2) A direct feed stock to fertiliser plants and many other industries needing green hydrogen as feedstock
(3) Ammonia can be cracked back to produce green hydrogen which can be used as a fuel in vehicles and ammonia can be directly used as fuel and for power generation
(4) Ammonia can be directly used for power generation both through thermal and fuel cell route.

This is crazy growth during IT slowdown phase