Over the past year, India's benchmark BSE Sensex appreciated 64.6%, much more than the 27.8% and 48.1% increases in the Shanghai SE Composite Index and the Hang Seng Index, respectively.The Indian equity markets are trading at a relatively attractive price-to-earnings ratio of 16.8 compared with 18.3 of the Shanghai Composite Index. This has triggered a wave of overseas investments into the Indian equity markets, driving the benchmark Sensex to around the 18,000 level for the first time since early 2008.
India's mortgage market, at around 9.5% of GDP, is relatively underpenetrated compared to the BRIC (Brazil, Russia, India, China) average penetration of 15%-20% of GDP. Favorable demographics and a demand-supply mismatch are expected to result in 15% home-loan growth over fiscal years 2010-12. Robust growth in home loans over FY10-12 is expected to drive HDFC's loan book at a CAGR of 17.5% over the next two years, higher than the expected overall growth in home-loans. HDFC Bank is a private banking and financial services company in India operating across three segments: retail banking, wholesale banking and treasury services. The company's stock increased 17.6% year to date and closed at its 52-week high of $147.87 in trade on April 9. The stock has outperformed the NYSE Composite Index, which increased 6.2% year to date. At $147.72, HDFC stock is currently trading at a P/E multiple of 32.6. The stock has two buy, one hold and no sell ratings, according to TheStreet's Analyst ratings guide. Icici Bank is engaged in providing a range of banking products and services to corporate and retail customers through a variety of delivery channels. The company's stock increased 19.3% year to date and closed at its 52-week high of $45.95 at close of trade on April 6. At $45, HDFC stock is currently trading at a P/E multiple of 27.1. The stock has one buy, one hold and no sell ratings, according to TheStreet's Analyst ratings guide.
Tata Motors is engaged in the development, design, manufacturing, assembly and sale of vehicles, including financing thereof, as well as sale of related parts and accessories. "The people's car," the Nano, which was launched during early 2009 brought Tata Motors into the limelight of the world. Tata Motors turned around the Land Rover brand that had reported its best-ever monthly sales in the U.K. market with a sales rise of 67% in March. Meanwhile, Jaguar's total sales increased by a modest 1.1% but the performance was stronger as comparisons were impacted by discontinuation of smallest model, X-type. Tata Motors' stock increased 14.7% year to date and closed at its 52-week high of $19.48 at close of trade on April 5. At $19.34, the stock is currently trading at a P/E multiple of 26.5. The stock has three buy, one hold, and no sell ratings, according to TheStreet's Analyst ratings guide.