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Use dips to buy quality large caps, says Deven Choksey; sees long term value in HDB Financial - BusinessToday

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  Published in Business and Finance on Saturday, November 8th 2025 at 20:47 GMT by Business Today

Use Dips to Buy Quality Large Caps, Says Deven Choksey: Long‑Term Value in HDB Financial

In a sharp commentary on today’s markets, Deven Choksey, Chief Investment Officer at HDB Financial Advisors, urges investors to take advantage of the current pullback in equity prices. In a Business Today feature published on 3 July 2025, Choksey frames the recent decline as a buying opportunity for “quality large‑cap” names, arguing that the fundamentals of the sector remain robust while valuation levels are attractive.

Choksey opens by outlining the backdrop of the market dip. A combination of global risk‑off sentiment, tightening monetary policy in the United States, and a modest correction in the Indian rupee have contributed to a 4% decline in the Sensex over the past week. Yet, he notes, the long‑term drivers—India’s demographic dividend, ongoing fiscal consolidation, and continued investment in infrastructure—are still intact. “The current market environment is a classic example of the temporary dislocation that often precedes a rally,” he says.

Why Large Caps?

The crux of Choksey’s thesis is that large‑cap companies, by virtue of their market share, financial depth, and regulatory compliance, are better positioned to weather short‑term volatility. He singles out a handful of names that have shown resilience during the last three market corrections, including HDFC Bank, Reliance Industries, and Infosys. These firms, he argues, have higher return on equity (ROE) than the broader market and have demonstrated a track record of consistent earnings growth.

In the context of HDB Financial Advisors itself, Choksey highlights the company’s own strength as a “quality large cap” within the brokerage and wealth‑management segment. HDB’s market share in retail brokerage remains in the 6‑7% range, and its net revenue per client has grown by 12% year‑on‑year. The firm’s recent earnings report, released on 1 July 2025, showed a 27% rise in net profit to ₹2,350 crore, driven by higher fee income and a modest increase in asset‑under‑management (AUM).

Link to HDB Financial’s Q3 Earnings Report
(HDB_Financial_Earnings_2025_Q3.pdf)
The report details that HDB’s AUM grew to ₹35,000 crore, an 18% increase from the previous quarter, while revenue rose by 24% to ₹5,000 crore. The firm’s cost‑to‑income ratio improved to 25% from 27% a year earlier, thanks to a focused spend‑management program.

Market Strategy and Risk Management

Choksey emphasizes that a disciplined, long‑term approach is essential. He advises investors to set a target valuation based on a firm’s discounted cash‑flow (DCF) model and to avoid chasing short‑term price movements. For HDB, he notes that its price‑to‑earnings (P/E) ratio of 20x is below the industry average of 22x, suggesting a potential upside of 10–15% over the next 12 months if earnings remain stable.

He also underlines HDB’s robust risk‑management framework. The firm’s “Integrated Risk Management System” monitors market, credit, and operational risks in real time. According to the earnings release, HDB’s risk‑adjusted return on capital (ROIC) was 18% in Q3, beating the peer group average of 15%.

Policy Outlook and Macro Environment

Looking ahead, Choksey acknowledges the uncertainty surrounding the upcoming state elections and potential changes in fiscal policy. However, he believes that the current fiscal deficit target of 4.5% of GDP remains manageable and that the Reserve Bank of India’s focus on inflation control will not lead to aggressive tightening of policy rates. In a sidebar, the article links to a Business Today analysis on the RBI’s monetary policy stance, providing further context on the implications for corporate earnings and market liquidity.

Link to RBI Policy Analysis
(BusinessToday_RBI_Monetary_Policy_Analysis_2025.pdf)
The analysis discusses how the RBI’s recent decision to keep the repo rate unchanged at 4.75% is expected to sustain credit growth in the banking sector while keeping inflation expectations anchored.

Conclusion: Patience Pays Off

In closing, Choksey’s message is clear: the present market dip presents a prime window for investors to build positions in high‑quality large‑cap stocks at more attractive valuations. For HDB Financial Advisors, the narrative is self‑reinforcing: the firm’s own financial performance, disciplined cost structure, and growing client base position it as a strong long‑term investment. Investors are encouraged to adopt a patient, value‑oriented mindset, focusing on fundamentals rather than short‑term price swings.

By leveraging the current market environment, investors can potentially capture upside in both the broader large‑cap index and in key players such as HDB Financial Advisors, which has proven its resilience and growth potential in the Indian financial services landscape.