Fundamental picture of HDFC, HDFC Bank remains extremely convincing: Deven Choksey
Deven Choksey of KRChoksey is bullish on the HDFC twins from a fundamental perspective. One of the important things he likes about the proposed HDFC-HDFC Bank merger is the increase in the size of mortgage assets on the books. “This gives you two advantages. One: You have a significantly higher amount of unsecured assets into your books. Two: A steady flow of income,” he says.
Choksey is of the view that a bank will not be able to win customers unless it enhances digital access to the customer at a time when digitisation is taking place at a rapid speed.
“This particular merger would also help them expand their reach to the customer. But more importantly, with digitisation not seen in the horizon at this point of time, the margins will come down. In a situation like this, when the margins are expected to come down, when you have a secured asset like housing, even though it is slightly lower margin at this point of time, you have a relatively stable book as far as the bank is concerned. In my view, the larger size would probably invite enough amount of recognition also from the global. I think all these points are working in favour at the design level, if I may put it this way, as far as this merger is concerned,” he says.