HDFC bank commands highest PE in its peers, only reason is market see the growth potential in it, same applies to asian paints but according to you market dont see the potential of reliance, this type of view only an insider can have
Best of luck...
And just for the sake of conversation again, I would never touch a HDFC Bank or an Asian Paints. Why bother with a stock where people expect a lot of good things to happen, and all those good things are already factored in? How much upside do you see from that?
My entire philosophy is to find stocks where market is NOT pricing in all the good things. Where market is not factoring in changes in the future.
HDFC Bank has a better position on NPAs relative to its peers. But I happen to believe that the banks that got badly hit on NPAs are the place to be - because the risk is way lower when all the bad news is priced in, including expectation of hidden bad news in future! And people are not pricing in the impact of recent measures to tackle bank loans - bankruptcy bill, securitization, ARC, etc. Plus people worry about only the hidden bad loans in the future - but don't realize that the fully provided for bad loans of 80's and 90's also come under purview of recent legislation. People forget that Raghuram Rajan tried to avoid cutting rates, to put pressure on banks to tackle the problem head on. Whereas, with the new MPC, and with lower expectations of inflation, RBI stance on rates has clearly changed. Biggest beneficiary of this are of course the banks.
Asian Paints is going to be a horror story - the stock benefited massively purely and only because huge fall in crude oil lowered its input costs massively - but they had zero pressure to lower prices. Last year numbers were phenomenal because of that. And analysts havent caught on to that side of the story - they assume something fundamental has shifted in the company, and it will continue to grow profits at the rates of last year! Good luck with that expectation.
If you picked up HDFC Bank and Asian Paints long back, and rode the shares, that's awesome - if you are picking them up now, well, I wish you luck!