Money follows balance sheets.
DRChoksey Finserv Managing Director Deven Choksey is steering capital toward India's largest loan books, placing HDFC Bank at the top of his financial sector conviction list even as peer lender ICICI Bank commands recent price outperformance. Expanding credit demand and persistent foreign institutional allocations continue to anchor the banking trade.
"Preference at this point of time will remain with HDFC Bank," Choksey said, pointing to lower downside risk and unpriced upside potential as internal operational corrections begin to yield results.
Size dictates quarterly pricing power.
"We continue to like the larger loan books, be it State Bank of India, be it ICICI Bank, or even for that matter, NBFCs," Choksey said. "The larger the size of the book, the better the benefits are going to be in the subsequent quarters."
Recent balance-sheet expansions across the non-banking space affirm that thesis. Capital raises pushed through by IIFL Finance and Bajaj Finance signal institutional appetite for retail credit assets amid accelerating economic activity across tier-two and tier-three commercial centers.
| Sector / Asset Class | DRChoksey Stance | Preferred Names | Watchlist / Stretched Valuations |
|---|---|---|---|
| Large-Cap Banking | Heavy Overweight | HDFC Bank, SBI, ICICI Bank | ICICI Bank (short-term outperformance priced) |
| Retail NBFCs | Accumulate on Scale | Bajaj Finance, IIFL Finance | Non-scale consumer lenders |
| Pharmaceuticals | Selective Large Generics | Sun Pharma, Cipla, Dr Reddy's | Divi's Laboratories, Laurus Labs (hold only) |
| Consumer Retail | Valuation Caution | Shanti Gold (B2B supplier tracking) | Titan, Kalyan Jewellers (fully valued) |
| Raw Materials / Chemicals | Favour Consumers | Speciality Chemical producers | Upstream Oil Exploration & Production |
Choksey slammed the practice of retail traders chasing stocks that have already surged into overextended territory.
While portfolio holdings like Divi's Laboratories and Laurus Labs remain core investments on DRChoksey Finserv's books, he shut down calls for fresh capital deployment into either stock at existing levels.
Instead, he shifted attention to legacy generic drugmakers—specifically Sun Pharma, Cipla, and Dr Reddy's Laboratories.
"They are ready with the products," Choksey said, tracking operational pipelines designed to capture high-margin export market shares as blockbusters face overseas patent expiries over the next twenty-four months.
A return of 15% to 20% over the medium term remains achievable if factory execution and regulatory compliance stay intact.
Market Context: Indian institutional capital continues to rotate away from hyper-valued momentum mid-caps into lagging large-cap bluechips where valuation cushions limit drawdown risk during volatile global trading sessions.
Consumer retail multiples, by contrast, offer little margin of safety.
Choksey singled out jewellery retail bellwethers Titan and Kalyan Jewellers, noting their extended trading runs have pushed valuations into expensive territory. Yet consumer demand further up the pipeline tells a different story.
He prefers unheralded business-to-business jewellery manufacturers supplying those very retail storefronts, naming Shanti Gold as a business model worth tracking—though his firm holds no direct equity position in the counter.
In industrial materials, Choksey separates users from producers.
He refuses to chase upstream oil producers, preferring downstream consumer sectors—most notably speciality chemicals makers. These processors are locking in cheaper feedstocks through disciplined spot market buying and aggressive forward pricing contracts, protecting gross spreads against input price swings.
Technology spend rounds out the positioning map.
Indian large-cap IT firms are picking up enterprise-level artificial intelligence contracts, while engineering research and development (ER&D) service providers capture order flows driven by embedded software and industrial digital engineering.
Market focus now shifts to impending fourth-quarter earnings prints and operational updates, where net interest margins across mega-cap banks will validate whether HDFC Bank's valuation gap against its private peers begins to narrow.