It seems that the market is valuing Gruh more like A FMCG than a HFC because of its high ROE and div. Payout ratio. But htere are 2 points to be noted here 1. In past Gruh has grown faster than FMCG cos.
in future also it is likely to grow faster than them despite all the concerns in view of the huge potential.
2. FMCG cos. don’t have to deal with NPA problem but GRUH has to. But here also the past record
comes into the picture and in future also the position is unlikely to change given the quality of Management
and its parent HDFC. No doubt, market is giving GRUH high P/E and P/BV.
KRISHAN
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