Subsidiaries pad up HDFC stock, core biz valuation touch all-time low

The rub-off effect of subsidiaries is quite prominent on the stock price movement; loan growth at 12 per cent in July-September quarter

Having a motley pool of subsidiaries has its own advantages. While in the initial years, the parent company’s capital may be fast consumed by its subsidiaries, the payoffs could be meaty when they mature. Housing Development Finance Corporation (HDFC), the country’s largest mortgage lender, is the best example to support this.

Its core mortgage business isn’t keeping pace with past records — loan growth at 12 per cent in the July-September quarter (second quarter, or Q2), marking two successive quarters of growth slipping below the 17–20 per cent levels seen in the past two financial years.

Consequently,