Couple of points because to which HDFC is not apples to apples with Citi and likes:
- Citi is pretty much a global financial institution unlike HDFC. It is exposed to multiple country specific risks. In bad times, Citi is more vulnerable I feel.
- Citi also would have more risky operations (which we saw during GFC what these FIs are involved in), which HDFC is generally not involved.
- Citi also would have investment banking operations which HDFC is not involved in.
So while due to the size HDFC will get compared to the global giants, however I feel there are significant differences in businesses and hence valuations should be different.
Having said the above, I feel we should not be anchored to the historical valuations of HDFC Bank and expect that there will be mean reversion. Going forward the average valuations could reduce.
Disc: invested
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