Fundamental analysis of HDFC Bank (ppt)
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The document provides a comprehensive analysis of the banking sector in India, focusing on HDFC Bank amidst current macroeconomic uncertainties and industry challenges. It highlights HDFC's strong financial performance, including its low NPA ratio and impressive growth metrics compared to public sector banks. Despite industry stress, the future outlook for the banking sector remains optimistic, with HDFC Bank positioned well for continued success.
Fundamental analysis of HDFC Bank (ppt)
- 2. Mission Funda Analysis • Banking Sector. • HDFC Bank. • Expendables:– Manoj Kajla – Praveen Yadav – Col Ajay K Raina
- 3. Macro E Outlook • To Mr A :Uncertainities+Volatility+PolicyParalysis. • To Mr B:Survivor+FundamentallyStrong+Recoil. • EO/PMO 2013-14:– GDP and FOREX Res headed South. – Great Monsoons and improving CAD & Fiscal D. – Rupee Northwards.
- 4. Macro E & Banking • Liquidity tightening:– CRR/99% to 95%. – Repo-MSF gap/300 to 150 pts. • News of NPAs and Provisions. • Industry under stress but in a consolidated, competitive and risk-management mode. • Banking Reforms still on.
- 5. Porters’ 5 Forces • Barriers high but entrepreneurial threats and Insurance companies venturing into mortgage. • Suppliers affected by Inflation; steal HR. • Buyers, esp corporates, are KINGS! • Substitutes – Black Money, NBFCs, 0% Fin. • Competition – Not all inclusive and yet all available covered; ‘pay’ to lure.
- 6. Indian Banking Industry... • Planning Commission’s 12th Plan + Vision 2020: – Qualitative rather than quantitative expansions. – 13.4% ahead vis-à-vis 16.7% earlier (05 yrs). – 80% banking through PSBs. • The Present Scene. – – – – PSBs focusing on reducing frills and NPAs. Pvt Banks consolidating. Pvt ones are leaders in technology. PSBs had an edge in penetration but competition catching up. • Raghuraj’s Committee – more small, localised ones.
- 7. …Indian Banking Industry • New RBI Governor – Industry optimistic. – The pressure would continue for a while. • Big SBI v/s more efficient HDFC and AXIS Bank. • The future that envisages growth of the nation, cannot ignore a parallel growth of banking sector………….. that being something inevitable, future looks bright for the industry despite present hiccups and glitches.
- 8. HDFC Bank • Compounded annual growth of 29.5% - 10 yrs. • Net interest margin = 4.5% v/s 3.77% of SBI (Means a lot when ₹ 35,861 Crore are involved) • NPAs of 0.18% v/s 5.6% of PSBs. • Promoters (22.83%), FIIs (34.07%) and total Institutional (42.6%)….. Indicate something! • No dip in profits (YoY) till date.
- 9. KPIs as v/s SBI (Mkt Cap of 151,378 : 110,242 ; Market Share of 5% v/s 18%) • • • • • • • • NPM R (PAT/Total Income) -16% v/s 3.77%. Cost/Income R – 48% v/s 45%. Investments: Provisions – 3 times v/s 3 times. ROE – 18% v/s 12%. PE R – 22 v/s 8 (Industry – 9.31). CAR – 16.8% v/s 12.9% vis-à-vis 9% Basel. NPA – 0.18% v/s 5.6% Nifty Weightage – 32.5 v/s 11.6
- 10. Conclusion…. • Macro E. – Strong fundamentals; – Growth path; – Banks have a role to play…. K Factor. • Banking Industry. – Tough times do not last long; tough guys do. – Stressful times and YET HDFC has out-performed.
- 11. ….Conclusion • HDFC Bank. – Lean, mean and smart : 5% share; Top in cap. – Trading at 5x BV. – PE is beyond reach. – At 611, it is well placed between 52 Weeks high of 727 and low of 505. – Shall BUY!
- 12. Thank You!!