HDFC Bank has been a blue-eyed boy(metaphorical) for retail, HNIs, domestic & international institutional investors
The bank through an amazing focus on governance, lending norms, and focus on generating returns to beat market estimates till Covid-19.
In the Covid-19 period the uncertainties are:
- NPA provisioning
- Decrease in appetite for borrowing among retail borrowers
- Increased competition from new digital entrants
- Tighter regulations by the RBI
- Higher cost of borrowing for the bank
Despite a return of ~43% in the past year, the bank will not have a smooth ride going ahead. The past return was based on the pre-covid approach. The post-covid measures will show up in the coming quarters. Subsequent return of Covid-19 with lockdowns can impact returns.
Hope this helps
All the best!