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Author: TMFCogitarius Big gold star, 5000 posts Old School Fool Home Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 619  
Subject: Re: Take a small position? Date: 12/11/2012 12:55 PM
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Dr. D.:' In re-reading the last several months worth of posts the sentiment about investing new money now seems mixed.'

Hi Doc -- HDB's stock has been on a roll this year, so it's fairly pricey now at P/B 4.5 vs 5 yr average of 3.9. And much higher than the 2.3 of ICICI Bank, its closest comparable peer.

Executive Director Sukthankar says "I see no reason why credit growth won't be somewhere at 16-17 per cent range this year and potentially going up to the higher teens as the GDP growth picks up". As we've seen, they usually forecast mid teens loan growth, then blow past it.
http://www.rediff.com/business/slide-show/slide-show-1-hdfc-...

Most importantly, by all accounts they are by far one of the best managed banks around, in the true sense of what retail banking is supposed to be about. And they're by far the leading private player in one of the world's most underbanked developing nations. Supervised by one of the very few central banks still with its wits about it.

As for India's growth prospects, the approval of retail FDI is a good early indicator that this government can get its programs going even in India's chaotic democracy. One big battle won, but many more to fight. Hopefully the Rupee will start reflecting that next year.

Nate (our HDB guru) estimates fair value in the $38-41 range subject to Fx rates, so that's another indication of the current ~$42 price being somewhat rich.

With the usual benefit of 20-20 hindsight, May-Jun 2012 was a great buying opportunity!
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