HDFC Bank screening reasonable growth

March 25, 2011 - PRLog -- If I look at some of your concentrated holdings, there is HDFC, TCS and Indian Hotels. Why HDFC Bank and why not ICICI Bank and why Indian Hotels, hotel companies do not have pricing power?

IV Subramanium: It depends on where you look at whether they have the pricing power or not and clearly in a country like India where there were lot of announcements made by many companies in terms of addition to rooms, we have not seen that coming so easily. So the existing players who still have good locations will continue to have fairly good room rates as well as occupancy ratio and finally it is not just about pricing power, it is also the price at which the stock is available.

So if we look at the enterprise value per room or any of these matrixes, we still find that stocks like Indian Hotels are attractive enough to hold and HDFC and ICICI again is largely to do with valuations and given the nature of the business they are in, one was an aggressive bank earlier is now trying to become more stable. The other was always a very reasonable growth bank. So at certain valuations, we are okay to looking at both the companies. Currently we find HDFC Bank to be more attractive

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