HDFC Bank valuations attractive, banking sector ready for next growth phase: Sandip Sabharwal

Analyst Sandip Sabharwal believes HDFC Bank valuations are attractive at around Rs 1,800, trading at a discount to several private peers, with the key remaining trigger being the next CEO appointment. He noted that operational challenges from the HDFC-HDFC Bank merger are largely behind the bank. On the broader banking sector, he highlighted 18 percent credit growth, stable asset quality, and easing NIM compression as supportive factors, expecting most large private banks to perform well over the next one to two years. He also flagged the deposit-credit gap as a concern but said expected FCNR(B) inflows of 50-60 billion dollars would ease liquidity pressures. Separately, he expressed reservations about Persistent Systems' recent acquisition, calling it expensive with an unjustified valuation premium.