(Bloomberg) –All around HDFC Bank Ltd., India’s biggest lender by market value, the news seems to be bad and getting worse: economic growth is slowing, loan losses are rising and shadow banks are mired in crisis.

And yet investors keep piling into HDFC Bank’s stock, convinced it will emerge a winner from India’s financial woes. The company’s market value has surged by $21 billion over the past year, more than any other bank worldwide. Among the 25 biggest lenders globally, no other stock commands a higher price relative to earnings or net assets.

Bulls say they have good reasons to be optimistic: HDFC Bank will grab market share from embattled shadow lenders and benefit from a flight to quality by investors who’ve grown wary of smaller competitors. While skeptics argue that the bank is vulnerable to India’s economic challenges — pointing to its large consumer loan exposure and the looming retirement of its longtime leader — even they say betting against HDFC Bank is risky. Among 54 analysts who cover the stock, only one has the equivalent of a sell rating.

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“The business continues to perform very well,” said Nick Payne, the London-based head of global emerging markets at Merian Global Investors (U.K.) Ltd., which oversees about $33 billion and has been adding to its holdings of HDFC Bank shares. “Strong banks and franchises tend to get stronger when times get tough, as the weak fall by the wayside.”

India’s shadow banks, until recently a growing competitive threat to HDFC Bank and its peers, have been reeling since the latter half of 2018, when a group company of Infrastructure Leasing & Financial Services Ltd. defaulted on its debt and triggered an industrywide credit squeeze. Mortgage lender Dewan Housing Finance Corp Ltd. has missed debt payments since June, while firms including Reliance Capital Ltd. and Piramal Capital & Housing Finance Ltd. have had their credit ratings cut on liquidity concerns.

The turmoil has come against a backdrop of five straight quarters of slowing economic growth, the highest unemployment rate in 45 years, and predictions that bad loans at Indian banks will jump to a record 12% by early next year.

All the while, HDFC Bank’s stock price has marched higher. Now valued at about $92 billion, the company trades for 24 times projected earnings over the next 12 months. That’s almost three times more expensive than the Bloomberg World Banks Index, within a hair’s breadth of the biggest valuation premium on record. The company’s price-to-book ratio of 4.3 compares with 1.5 at JPMorgan Chase & Co., the biggest U.S. lender by market capitalization.

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Not everyone is convinced the outsized gains will continue. Gautam Chhugani, an analyst at Sanford C. Bernstein & Co., downgraded HDFC Bank to market perform from outperform on Sept. 9. He cited succession risks around next year’s planned departure of Aditya Puri, who has led the company since 1994, as well as the potential for deteriorating asset quality in the bank’s 4.43 trillion-rupee ($62.5 billion) retail lending portfolio.

While HDFC Bank has said loan losses in its retail business have been stable and within expectations, that could change if India’s economic growth and employment trends continue to worsen.

Retail credit costs “are unlikely to remain benign over the medium term,” Chhugani said.

HDFC Bank didn’t respond to a request for comment.

Optimists draw comfort from the firm’s nearly unmatched track record of keeping loan losses in check throughout multiple economic cycles. HDFC Bank’s per-share book value has grown at a compound annual rate of more than 20% over the past decade, while its gross nonperforming loan ratio of 1.4% at the end of June was the lowest among Indian peers.

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HDFC Bank is likely to report “strong’” profit growth and stable asset quality for the quarter ended September, Diksha Gera, an analyst at Bloomberg Intelligence, wrote in a report on Friday. As shadow lenders retrench, the bank will pick up market share, said Ross Cameron, the head of Northcape Capital Ltd.’s Japan office. It should also get a boost from a recently announced cut to India’s corporate tax rate.

“HDFC Bank’s share price is underpinned by its strong earnings growth, which has proven thus far to be fairly resilient” to India’s economic headwinds, said Will Malcolm, a fund manager for emerging market equities at Aviva Investors Asia Pte. He called the stock a “core holding.”

“Nothing is forever and we expect volatility in the market,” said Kristy Fong, an Asian equities investment director at Aberdeen Standard Investments in Singapore. “HDFC Bank, however, should continue to be a long-term compounder.”