HDFC Bank Ltd

“HDFC Bank is still one of India’s strongest banking franchises, with durable funding advantages, scale, and a long reinvestment runway, but the post-merger drop in return on equity has moved the story from elite compounding to proven-quality-awaiting-reacceleration. The balance sheet is sound and the odds of permanent franchise damage look low, yet the current valuation already discounts some recovery. That leaves limited margin of safety unless management demonstrates sustained normalization in profitability and incremental returns.”