HDFC Bank: Class action suits may prove to be an interim dampener

The stock may underperform until the Street gets clarity on asset quality and outcome of the litigation

Topics
HDFC Bank | Compass | HDFC Bank shares

Hamsini Karthik  |  New Delhi 

Just when the HDFC Bank stock was beginning to regain its momentum, three US-based law firms filing class action suits against the lender dragged its stock price by over five per cent in a week. On a year-to-date basis, HDFC stock has shed 18 per cent.

These lawsuits pertain to the vehicle loans, accounting for 11.8 per cent of the bank's total loans. Analysts feel the litigation could cap the stock’s upside until a verdict is reached. “Class action suits are common in the US and until proven guilty, they don’t materially impact the balance sheet,” says an ...
First Published: Tue, September 22 2020. 17:53 IST
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