HDFC Bank: Growing dependence on corporate loans isn't a long-term positive

Yield on advances declined by 133 bps year-on-year in Q3 as mix shifts in favour of corporate loans

Among those which have announced the December quarter (Q3) results so far, HDFC Bank saw the highest earnings upgradation (8– 11 per cent) for FY22 on the back of strong results. In the near-term though, the stock has been a laggard, down six per cent in a week. With high foreign portfolio investor concentration and foreign investors lately turning sellers in emerging markets including India, HDFC Bank stock’s price correction may just be a technical adjustment.

That said, while the results in Q3 exceeded expectations, investors of HDFC Bank have to be mindful that growth lately is coming more from