HDFC twins are trading at historic valuation discount vs Sensex

Analysts expect trend to persist till FY23 end, in light of headwinds

For the first time since the 2008 Lehman Crisis, HDFC and HDFC Bank are trading at a valuation discount to the broader market. Historically, both these firms have traded at a significant premium to the benchmark BSE Sensex’s valuation.

Mortgage lender HDFC is currently trading at a price-to-book-value (P/BV) ratio of 2.45 times (x) on a consolidated basis, a 30 per cent discount to the Sensex P/BV ratio of 3.47x on Thursday. Ditto for HDFC Bank. India’s largest private sector bank is valued at 3x its book value at its current stock price, a 13 per cent discount to the index