FIPB approval would be a key trigger for HDFC Bank's stock: Mayuresh Joshi of Angel Broking

In a chat with ET Now, Mayuresh Joshi, VP-Institution, Angel Broking, shares his view on HDFC Bank.

ET Now: HDFC Bank is clearly underperforming not only the Bank Nifty but also the Nifty this year, why is that happening? Is the dream run in HDFC Bank over?

Mayuresh Joshi: One of the major factors is the FII limits. They have breached their limits and the FIPB approval for enhancing their FII limits would be a key trigger for the stock going forward.

When it comes to core earnings, we have no dispute that HDFC Bank is right there at the top. It is a consistent performer when it comes to the top line though due to weak macro conditions, it could not maintain its run rate of 30% plus but even a 25% plus run rate is quite commendable in such market conditions.

It has always traded at a premium when it comes to its peers say like an Axis or an ICICI but the premium is justified looking at its franchise, its deposit peers, kind of advances that it makes, and the noninterest income that the bank is able to garner. So, in that sense itself, a stable asset quality, strong capitalisation, it makes a very very good proposition to hold on to the bank for long term though. However, our take is that our top picks from the private space would still remain Axis and ICICI Bank when it comes to pecking order.