Mehabe score: 5 G Factor: 4 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 5.
Description
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. HDFC Bank is a publicly held banking company, the bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. It is engaged in providing a range of banking and financial services including retail banking, wholesale banking and treasury operations. It is promoted by HDFC Ltd. which has 19.32% stake as on September 30, 2020. Currently, HDFC Bank Ltd. (HBL) is the largest private sector bank in India. As on March 31, 2020, the bank’s total balance sheet size stood at Rs. 15,30,511 Cr. Site:HDFCBANK Main Symbol:HDFCBANK
Stock trades at 1545.0, above its 50dma 1523.93. It also trades above its 200dma 1502.1. The stock remains bullish on techicals
The 52 week high is at 1725.00 and the 52week low is at 1342.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 19.96% CAGR over last 5 years
-‘s median sales growth is 18.67% of last 10 years
Weakness
– has low interest coverage ratio.
-Contingent liabilities of Rs.1020028.80 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.30885.49 Cr.
Competition
– The industry trades at a mean P/E of 19.1x. Kotak Mah. Bank trades at the industry’s max P/E of 38.51x. HDFCBANK trades at a P/E of 25.0x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 6.0. HDFCBANK has a G-Factor of 4 and Piotski scoreof 5.
– Average 1 month return for industry is 4.4%. The max 1- month return was given by ICICI Bank: a return of 10.64 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 34588.0 cr compared to Rs 31852.0 cr for period ended Dec 2020, a rise of 8.6% .
vis-vis 13503.0 for period ended Dec 2020 .
Operating Margins contracted -69.4 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 14423.0 cr for period ended Dec 2021 and operating profit margin at 41.7 % for same period.
The EPS for quarter ended Dec 2021 is Rs 19.11 compared to Rs 16.43 for previous quarter ended Sep 2021 and Rs 15.92 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 132969.0 cr for period ended TTM vis-vis sales of Rs 128552.0 cr for the period ended Mar 2021, a growth of 3.3%. The 3 year sales cagr stood at 8.1%.
Operating margins shrank to 16774.0% for period ended TTM vis-vis 16848.0% for period ended Mar 2021, contraction of 7400.0 bps.
Net Profit reported at Rs 36044.0 cr for period ended TTM vis-vis sales of Rs 31833.0 cr for the period ended Mar 2021, rising 11.7%.
Company recorded a healthy Net Profit CAGR of 17.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 42476.0 cr for period ended Mar 2021 vis-vis Rs -16869.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 16.0% compared to 17.0% over the last 3 Years. – The stock has given a return of 5% on a 1 Year basis vis-vis a return of 13% over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is 16% vis-vis a compounded profit growth of 20% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 37.47% vis-vis 38.23% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 13.6% vis-vis 13.25% for Sep 2021
Conclusion
– has delivered good profit growth of 19.96% CAGR over last 5 years
-‘s median sales growth is 18.67% of last 10 years – has low interest coverage ratio.
-Contingent liabilities of Rs.1020028.80 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.30885.49 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 1523.93 and is trading at 1545.0, thus bullish price action wise.
