At current quoted prices as in Feb 2014; the HDFC Bank is valued at a price-to-book value ratio of 4.29 against ICICI Bank’s 1.67. This means the market values HDFC Bank two-and-a-half times as much as the biggest private sector bank.
Seeing this post one need not jump in the market to buy this stock as in short term to medium term we may see HDFC value declining due to entry of more number of banks and stiff competition. However one can add this stock to their portfolio as a systematic plan. To be honest we are also very impressed with the working culture of HDFC bank as compared to ICICI bank as ICICI bank is trying to get the ounce of every blood out from their employees and same goes for their marketing efforts with the launch of tab banking. It is worthwhile to mention here that HDFC as a whole of the group is doing well as its insurance arm HDFC standard has also emerged as the best insurance provider in India.
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