HDFC Bank today become the second most valued company in India in terms of market valuation after it surpassed Tata Consultancy Services (TCS) on Tuesday. The market capitalisation of HDFC Bank hit Rs 4,73,530.72 crore during the afternoon trade, leaving behind the leading IT services company. HDFC Bank gained Rs 797.4 crore more than TCS’ Rs 4,72,733.32 crore valuation.
Shares of HDFC Bank have surged nearly 53 per cent so far this year, while that of TCS have risen by just about 5 per cent, making the IT company one of the laggards on the Sensex. HDFC Bank shares rose 0.73% to Rs 1,836.15 on the BSE today, while TCS shares rose 0.38% to Rs 2,473.
At a time when a majority of lenders are going slow on corporate loans due to their exposure and capital limits, HDFC Bank is seeking to expand its corporate loan book through refinancing. The bank had reported a total capital adequacy of 15.6% with the core tier-I component at 13.6% as of 30 June this year. HDFC Bank corporate loans grew 20% to Rs 1.25 lakh crore in the financial year 2016-2017.
The bank also has lowest non-performing assets and the gross non-performing assets as a percentage of total loans and advances rose to 1.24 per cent at end-June, from 1.05 per cent at end-March. However, the asset quality of the bank deteriorated because of exposure to one account identified under insolvency and bankruptcy code. HDFC had an exposure of Rs 909 crore to one of such accounts.
HDFC Bank’s fiscal first quarter net profit rose to Rs 3,894 crore for the April-June quarter of FY 2018 as compared to Rs 3,239 crore a year ago in the same period.
Meanwhile, TCS’s fiscal fourth quarter net profit fell 2.5 per cent on-quarter to Rs 6,608 crore from Rs 6,778 crore in the previous quarter last year. The company also disappointed on operating margin front, with the fourth quarter EBIT margin reported at 25.73 per cent in the quarter ending March 31, falling from 26 per cent in the quarter ending December 31.