HDFC group, with just five firms under its fold, has outpaced Tata group to become the country’s largest conglomerate in terms of market capitalisation, a sign of financial firms’ rising clout in the eyes of investors. HDFC Bank, in fact, is only the third company in Indian corporate history to cross the Rs 5-lakh crore market capitalisation threshold. At Wednesday’s close, the market capitalisation of HDFC group stood at Rs 10.40 lakh crore, which is Rs 1,185 crore more than that of Tata Group, according to Bloomberg data. The steel-to-software conglomerate was valued Rs 2.5 lakh crore higher than the HDFC pack as recently as September 2018. Mukesh Ambani-led Reliance group is third in market cap ranking at Rs 7.06 lakh crore. Tata Consultancy Services (TCS) accounts for two-thirds of the group’s market valuation. HDFC Bank has a share of 55% in its group’s market capitalisation. Excluding TCS, Tatas have lost about a quarter of their value so far in 2018, with Tata Motors plunging 60.4%.
The market capitalisation of the Deepak Parekh-led HDFC group crossed Rs 10- lakh crore mark on July 10. While Tatas have about 30 firms listed on the bourses, HDFC group with its recent listing of HDFC AMC has become five-strong. Since the beginning of January 2018, the market capitalisation of HDFC group swelled by 21.8%, with HDFC twins and Gruh Finance rising in the range of 18.8% to 22.9%, whereas Tatas saw their market valuation climbing just 7.9% during the same period.
Barring eight companies, all Tata group stocks have given up value between January and now. While Tata Steel slid 25.6%, Tata Power and Voltas declined 19.1% and 16.2% respectively. The Mumbai-based HDFC Bank has consistently maintained a low bad-loan ratio by limiting its exposure to heavily-indebted corporates and focusing on retail lending. The bank’s stock, one of the most sought-after by both foreign and domestic investors, rallied 55.6% in 2017 after gaining as much as 11.2% in the year before. The benchmark Sensex gained 27.9% and 1.9% respectively during the same period.
HDFC group is one of the few blue chip companies in the country which is not run by a promoter family and is professionally-managed with a diverse institutional shareholding. As on Wednesday, 92% of the 50 analysts that track HDFC Bank had a buy recommendation on the stock, with Morgan Stanley having a one-year price target of Rs 2,550 per share, compared to the last closing price of Rs 2,122.35. As far as TCS is concerned, only 25 of the 50 analysts suggest a “buy”.