HDFC Bank

magnet

Active member
#1
I wanted this stock in my very long term portfolio.

But never saw my target price of 2000 to get this shares.

Now there have been sudden development hence now asking this question.

First is dividend which is not significant as it's not even 1% of stock value 16 Rs per share but most important is the board have decided to split the share so that retail participation increases.

The share will be split into 5 shares, so suppose if on day before split share is trading at 2800 next day it will start trading at rupees 560.

Now that will be a good level to enter the stock no doubt, but here lie my doubt. I have a feeling once this happens all market analyst will start jumping to buy the stock and will say its available at cheaper valuations than icici bank.And from that day onwards only I feel the stock will go up to 750-800 levels and might settle there. Meaning 20-30% return from 560 levels.

So will it be wise to invest now or I should still way for split? This stock won't be sold soon or something serious comes up in life until.

What do you guys think and suggest?

Note::I have taken 2800 levels though the share is trading somewhere between 2250 and 2400.
 
#2
Split does not alter the valuation of the stock, it merely reduces the ticket size for purchase.

The stock is already quoting at a premium with a price to book of 4 times FY12.

This is the best bank stock on most parameters and you should look for dips to buy, split or not.

Now whether it will go to 2800 or 3600 or even 2000 nobody can predict, so buy in small lots on all corrections.
 

magnet

Active member
#3
Thanks I was about to get my share. But don't know why I further reduce buy price from 2330 to 2310 and it tested 2330 levels. I hope it touches this level tomorrow.
 

Alchemist

Administrator
Staff member
#5
According to Reuters, HDFC Bank is world's most expensive bank:

Thomson Reuters StarMine's models also paint a flattering picture of its shares, a third of which are held by foreign funds. Trading at five times its book value, HDFC Bank is the world's most expensive lender and is among 15 banks globally to trade at a premium to its intrinsic value - a measure of how much shares should be worth when considering expected growth rates over the next decade.
The secret at the world's most expensive bank - Business - IBNLive
 

paran

Active member
#6
Hi,

What do you think? Is it advisable to buy at this level?

Or just stay away and watch?

Watching from 600 levels for correction but it keeps going up only :frown:.
 
#7
Hi,

What do you think? Is it advisable to buy at this level?

Or just stay away and watch?

Watching from 600 levels for correction but it keeps going up only :frown:.
HDFC Bank is an amazing stock. The asset quality makes it class apart.

Start accumulating this with a SIP mode. Keep buying in very small amounts at regular intervals and hold for really long term.

It will not double your money in quick time, but the compounding works like a magic even on a large base.
 

magnet

Active member
#8
The only thing to go with this stock is that their basics is alright.

They are not after the tag to be the number 1 in this or that.

Also one thing I notice and what even Deepak Parekh had mentioned in one of his interview.This bank doesn't lend a single rupee to its other other subsidiaries like HDFC .I am sure even to Gruh FInance they wont have lent.

He say the day we did so we will come out of the business.

I guess until Deepak Parekh and Aditya Puri are with them one should stick to the company blindly.
 

magnet

Active member
#10
Bought @ 668. I think from now on HDFC Bank share holders should be careful :D.

I said that because of my luck :frown:
Don't worry even I have negative luck. Hope both negative turns positive.

I had 3 shares at 440 levels in one folio. Bought 3 today in another folio.I'll try to SIP it up to 100 shares in next 5-10 years seeing fundamentals.

Tulsian gave his take banking shares are showing signs of big fall soon. Be prepare to enter.
 
#11
Bought @ 668. I think from now on HDFC Bank share holders should be careful :D

I said that because of my luck :frown:
Please go ahead and do a survey and find me some 'investors' who have lost money in HDFC Bank over the long term.

Start an equity Sip and keep buying regularly over a period of time. And start behaving like a part owner of the Bank, not a mere shareholder only.

You will be able to detach yourself from the day to day price movements and concentrate on the business performance.
 
#13
Please go ahead and do a survey and find me some 'investors' who have lost money in HDFC Bank over the long term.
What exactly does "over the long term" mean?

Someone who bought the stock at 350 in 2007 & sold it in 2009 at 154 would have lost money. I am sure there are a lot of such points over the last 5 years and a lot more over the last 10 years. And 'do a survey' is the only way one should find people who have lost money in a particular stock - then I can't even find investors who lost money in 'Satyam' because I am not equipped to do a survey.

Claiming one can never lose money in a particular stock is kind of ridiculous.
 

San Yad

Active member
#14
Why HDFC bank only?

There are lots of other companies whose fundamentals and balance sheet are so strong that even you would not hesitate to invest them.

But always remember there is a time set for every investor or trader to enter at a particular price of the stock.

Lets assume if nifty goes below 4k level will HDFC or anyone can survive at this level. I should say NO.

So there is always smart ways to invest not just close your eyes and keep putting your hard earning just because people say its strong stock and never come down.

Just for an example; Look at Tata Motor chart or any strong script.

How many ups and knee jerk downs you will notice?

Such stocks could not even come up for months even. Hence, one must wait for opportunities.

For investors and for traders there is always a level to step in and out. That's How we make money.

Claiming one can never lose money in a particular stock is kind of ridiculous.
Absolutely agreed with you.

Happy Investing!
 
#15
What exactly does "over the long term" mean?

Someone who bought the stock at 350 in 2007 & sold it in 2009 at 154 would have lost money. I am sure there are a lot of such points over the last 5 years and a lot more over the last 10 years. And 'do a survey' is the only way one should find people who have lost money in a particular stock - then I can't even find investors who lost money in 'Satyam' because I am not equipped to do a survey.

Claiming one can never lose money in a particular stock is kind of ridiculous.
The funny thing about statistics is you can always play around to support your point of view :D (Like picking 2007 buy and 2009 sell)

No one is forcing you to buy HDFC Bank, or for that matter even do a survey. So why take this personally.

Advice/Suggestions needs to be considered in the right context/perspective.

The crux of the post was to highlight that for stocks with fundamentals as solid as HDFC Bank, investors are unlikely to lose money over the longer term (5-7 years)

Also, you have ignored the other part of the quote where I suggested investing in a SIP mode over a period of time against lump sum buy. Please look at the complete picture and not part there of.

Of course there might be pockets in the past and future as well! where there would be investors with minimal gain/loss over 5-7 year periods, but the base case is extremely strong.

One must always go by a stronger base case and avoid unnecessary rosy pictures (2003-2007) /scenarios of doom(2008-2009)

Here's looking at the 10 year chart of HDFC Bank, one may rightly assume even the buyers at 2007 peak comfortably made decent money in HDFC Bank.



In the end, different opinions make the market. So for every buyer in HDFC Bank there is a seller and both thinks they are making the best decision :)

Happy Investing!
 
Last edited:
#16
The funny thing about statistics is you can always play around to support your point of view :D (Like picking 2007 buy and 2009 sell)
Exactly. You can chose other statistical points to say that one can never lose money.

No one is forcing you to buy HDFC Bank, or for that matter even do a survey. So why take this personally.
I absolutely did not take it personally.

Advice/Suggestions needs to be considered in the right context/perspective.

The crux of the post was to highlight that for stocks with fundamentals as solid as HDFC Bank, investors are unlikely to lose money over the longer term (5-7 years)
A good stock is not necessarily a good buy. A great stock is not necessarily a great buy. You cannot say a stock is a good buy without considering the price it's bought at. Ergo, its always ridiculous to say that you can never go wrong with a particular stock stock.

Also, you have ignored the other part of the quote where I suggested investing in a SIP mode over a period of time against lump sum buy. Please look at the complete picture and not part there of.
SIP is not some magic juice to make any investment a good one. If one started a SIP in 2004 & continued till 2008 in many stocks - not particularly HDFC), your overall purchase would have been expensive

So is your contention that one will never lose money on HDFC based on past prices or on it's fundamentals? If it's based on past prices, I can put up a similar chart for Satyam upto 2008 & prove it would have been a even better investment than HDFC.
 
#17
A good stock is not necessarily a good buy. A great stock is not necessarily a great buy. You cannot say a stock is a good buy without considering the price it's bought at. Ergo, its always ridiculous to say that you can never go wrong with a particular stock stock.
I will repeat what I said.

The crux of the post was to highlight that for stocks with fundamentals as solid as HDFC Bank, investors are unlikely to lose money over the longer term (5-7 years)
Hope the difference between the two is clear to everyone.

Some stocks will always remain elusively expensive to certain category of investors. If you do feel it is ridiculous to buy HDFC Bank at current levels, please explain a concrete bear case with justified reasons to convince investors to sell/reduce/avoid this stock.

I will be more than happy to read inputs for such a scenario. It is extremely important to understand the bear case to know what all can go wrong and where we may flounder.

Nobody is claiming here that one can never go wrong with a particular stock :) That claim alone sounds funny let alone for any real world stock :D I guess you once again missed the base case scenario. It is explained lucidly in Prof. Bakshi's interview. Please go through it if possible.

Not all stocks suit all type of investors. But it is not worthy to discard different ways of making money in the market without walking the road yourself.

SIP is not some magic juice to make any investment a good one. If one started a SIP in 2004 & continued till 2008 in many stocks - not particularly HDFC), your overall purchase would have been expensive

So is your contention that one will never lose money on HDFC based on past prices or on it's fundamentals? If it's based on past prices, I can put up a similar chart for Satyam upto 2008 & prove it would have been a even better investment than HDFC.
Since you missed the essence of the post (refer above), this question again is meaningless with reference to the context. However, the call ( and not contention!) is based on solid fundamentals and not past historical performance.

ps: This is the last post regarding this from my side. Let all pessimists (on HDFC Bank ) develop a strong bear case, then I will put in my bull case and we will have a balanced view for anyone willing (!!!) to take a position in HDFC Bank.

Happy discussing and Happy investing!

Prudent_Investor.
 
Top