HDFC valuations indicate upside for stock: Listing of biz units is positive

Capital raising, listing of business units are positives

While investor sentiment is down on public sector banks (PSBs) and some private corporate lenders, there are others which are expected to continue creating value for its shareholders. Housing Development Finance Corporation (HDFC) is one such.
 
The HDFC stock has gained about 30 per cent over the past year as compared to PSBs on the Nifty, down 13.5 per cent; private corporate lenders have gained 15.3 per cent. After reporting a strong set of numbers in October-December 2017 (Q3, see table), a sum-of-the-parts (SOTP) valuation of the company looks attractive.
 
SOTP valuations take into account those of all