HDFC Bank (NYSE:HBD) became one of the most valuable financial institutions in the world in 2023 following the merger with HDFC Ltd — India’s premier housing finance company. However, the stock hasn’t impressed investors since the merger due to a stretched valuation and falling margins. While I appreciate the long-term trends behind investing in one of India’s premier institutions, I’m neutral on HDFC Bank.
HDFC Is a New Beast, But Investors Aren’t Keen
HDFC Bank’s merger with HDFC Ltd created a new beast of the banking world, but this has not been met with investor enthusiasm — the stock is down 8.7% over the past 12 months. Interestingly, the stock has actually performed rather well since Prime Minister Narendra Modi’s ruling alliance suffered an election shock in the spring, slumping to a slim majority, which caused many international investors to pull out of Indian stocks.
One reason for the stock’s general…
