Mumbai: The market capitalization of HDFC Bank Ltd on Friday crossed 3 trillion for the first time, making it only the fifth Indian company to achieve this milestone.

The bank’s market value is now double that of government-owned State Bank of India (SBI), India’s largest lender with a loan book that is three times bigger than that of HDFC Bank.

HDFC Bank shares closed at a record high of 1,187.35 on Friday, up 0.5% from their previous close.

Tata Consultancy Services Ltd (TCS), Reliance Industries Ltd (RIL), ITC Ltd and Oil and Natural Gas Corp. Ltd (ONGC) are the other Indian companies to have reached a market capitalization of 3 trillion; however, the value for the latter two firms has since fell below this mark.

At Friday’s closing prices, TCS is India’s most valuable company with a market capitalization of 5.06 trillion, followed by RIL at 3.15 trillion. ITC Ltd currently is valued at 2.9 trillion and ONGC at 1.82 trillion.

“HDFC Bank is again becoming a darling of investors and they are increasing faith on it due to the consistent earnings performance," said Amit Singh, vice-president- institutional equities at Choice Equity Broking Pvt Ltd.

HDFC Bank’s steady 20% profit growth quarter after quarter, as well as its immunity to the bad loans crisis, has helped its stock. It has a gross bad loan ratio of 1%, among the lowest for Indian lenders. A return on assets of close to 2% and a net interest margin of above 4% too have helped. Thus, investors seem to be taking a shine to the stock despite it trading at relatively high valuations of close to 3.6 times its expected book value for this fiscal.

In the last 12 months, the stock has gained 14.4% while the S&P Bankex, the broader gauge of banking stocks, fell 6.4%.

To be sure, gains in HDFC Bank shares this past week have been part of a surge in the broader market, with the Sensex and Bankex gaining 5.34% and 6.46%, respectively. Even the battered index of state-owned banking stocks gained 10.34% despite a run of poor results. In comparison, HDFC Bank rose 4.13%.

Among the analysts covering the HDFC Bank stock, 52 have a “buy" rating, three have a “hold" rating, while one have a “sell" rating, according to Bloomberg data.

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