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HDFC Bank will keep outperforming: S&P Global Ratings

Our Bureau Mumbai | Updated on October 20, 2020

In a thumbs up to the country’s largest private sector lender, S&P Global Ratings on Tuesday said that HDFC Bank has sufficient financial headroom to withstand downside risks from tough operating conditions in India.

“The bank’s results for the first half of fiscal 2021 were resilient and in line with our expectations,” it further said. HDFC Bank posted an 18.4 per cent growth in its net profit in the second quarter of the fiscal year.

“We expect HDFC Bank’s growth and earnings to significantly outperform peers’,” S&P Global said, adding that the bank’s loan book grew a robust 16 per cent year-on-year in the first half of fiscal 2021 driven by wholesale loans.

HDFC Bank is likely to grow faster than the industry by tapping underserved retail and small- and mid-size enterprise borrowers in semi-urban and rural areas and by increasing its share in working capital loans of high-rated corporates, it further said, adding that its domestic market share may cross 10 per cent in the coming quarters. HDFC Bank’s asset quality should also remain superior to that of the industry over the next two years, despite a likely deterioration from the Covid-19 fallout, S&P Global said.

The bank’s scrip closed 1.73 per cent higher on BSE at ₹1,224.15 apiece.

Published on October 20, 2020

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