HDFC merger: Superior cost structure and lower credit costs to offset impact on NIM, says Rahul Malani
The merger of HDFC Bank and HDFC Ltd is now complete, and analysts are assessing the impact on the stock. They believe that the merger will lead to dilution in ROA around 10-15 bps in the year term, but ROA will still remain way above the cost of capital. The stock is trading at a 30% discount to its long-term valuation multiple despite no slowdown in the growth patterns just as the merger was impending.
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