1
Please refer to important disclosures at the end of this report
1
1
HDFC Bank Limited is a private bank company. HDFC Bank has maintained
its profit growth at 30% CAGR to Rs 6726 crore till FY15 on then asset size of
Rs 590632 crore. PAT moderated to 20% growth to Rs 12297 crore in FY16.
Going forward, management expect PAT to grow at 21% CAGR in FY17-19
to Rs 21567 crore. It has 52.7% retail (Rs 283666 crore) and 43.7%
wholesale loan book in loan book of (Rs 254976 crore) as on FY17. The
bank has a strong liability franchise with CASA of 48% (in FY05-17)
(Q1FY18 at 44%) and retail term deposit comprising ~85% of total deposit
of Rs 554568 crore as on FY17. CASA and fee based income from cross-
selling continue to grow on a rising presence in remote locations. This led
cost of funds to be less volatile, thereby enabling lucrative NIM >4%
consistently. GNPA and NNPA ratios have been stable around 1-1.5% in the
last 25 quarters. Retail NPA had risen just once in the FY08 crisis to 2%. In
QFY18, agricultural NPA due to farm loan waiver increased GNPA ratio to
1.24% from 1.05%. Considering the healthy balance sheet growth, superior
asset quality and management, the bank is well placed to deliver consistently
with margin leadership and robust return ratios.The company has a RoE 17%
and is trading at a valuation P/BV of 5.07x of TTM earnings. Hence BUY.
BUY
CMP `1760
52 Week High / Low
1810/1159.3
Avg. Daily Volume
75,247
Banking
Market Cap (` cr)
453,341
2
BSE Sensex
31,531
Nifty
9,820
Face Value (`)
Reuters Code
HDBK.NS
HDFCB:IN
0.7
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
HDFC Bank
Others | Banking
August 11, 2017
2
HDFC Bank Ltd | Banking
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement HDFC Bank
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)