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It might be India's best and hardest financial sector job. HDFC Bank, the $99 billion Indian lender, is gaining market share, defying a widening economic malaise. Aditya Puri, having led the bank for almost three decades, is set to step down by the time his term ends in October. He will leave on a high note; his successor, however, will inherit a richly valued lender with a lot to lose. 

Official GDP growth slowed to 4.5 percent in the September quarter, the weakest pace since 2013. Private investment is weak, consumption is slowing, and exports are falling. Still, on Saturday HDFC reported it had grown loans at almost 20 percent year-on-year in the three months to the end of December. That's at least twice as fast as the overall market - remarkable given the broader reluctance of most other banks to lend.  

There are a few tiny signs of stress. Loan growth, for example, would have been even higher if it weren't for the sorry state of auto sales, which have crashed as Indians hold off buying big-ticket items. Gross non-performing assets stood at 1.42 percent of the total, compared to 1.38 percent in the preceding three months, rising marginally mostly due to trouble in agriculture. 

Regardless, it's the final stretch of an incredible run for Puri. HDFC's shares, including re-invested dividends, have outperformed the India Datastream Market Index by almost 22 times since the bank went public in 1995. It trades at a whopping 4.5 times its book value, comfortably above its five-year average of 3.8.

Not all private sector lenders have had such an easy time. Yes Bank, another upstart, also traded on lofty multiples 18 months ago. Its boss, Deutsche Bank veteran Ravneet Gill, has watched valuation deteriorate further on his watch, with the bank now struggling to raise capital of barely 0.3 times book value.  

HFDC cannot remain completely immune to the economy: a sustained consumer slowdown, for example, may yet weigh it down. Banks are competing harder for retail deposits. And the Reserve Bank of India expects bad loans will continue to rise. That makes it a delicate time to take the reins of an institution. It could be a long way down from here.

The author is Una Galani, a Reuters Breakingviews columnist. The article was first published on Reuters Breakingviews. bizopinion@globaltimes.com.cn