Everything looks hunky-dory.
Now let us go into details.
THE DEVIL IS IN THE DETAILS!!!
The above figure represents the results after the merger of HDFC twins. Post merger, the number of shares outstanding has gone up.
Now let us go into details.
THE DEVIL IS IN THE DETAILS!!!
The above figure represents the results after the merger of HDFC twins. Post merger, the number of shares outstanding has gone up.
The Revenue & PAT (Q3FY24 vs Q3FY23), both the metrics improved. But the diluted EPS (earnings per share) fell from 22.68 to 22.65.
CASA (Current Account % Savings Account)
This is a key metric for banking. The funds in these accounts are almost like free source of funds for the bank.
Banks do not pay any interest to the current account holders.
This is a key metric for banking. The funds in these accounts are almost like free source of funds for the bank.
Banks do not pay any interest to the current account holders.
Since Interest rates were on rise, people started preferring FD rather than CA or SA (CASA).
Hence, this aspect is bad for the bank.
Hence, this aspect is bad for the bank.
Let us have look in to the interest income and the interest margins of the bank.
Net Interest Income increased but the Net Interest Margins contracted from 4.1% to 3.4%.
This has a major impact on ROA and ROE of the bank
Net Interest Income increased but the Net Interest Margins contracted from 4.1% to 3.4%.
This has a major impact on ROA and ROE of the bank
he customer base has increased along with Branch network (8091 vs 7183)
This resulted in the increase of operating
expenses, which is measured through cost to income ratio.
Reduction in the Net Interest Margins along with an increased cost to income is a negative news for the bank.
expenses, which is measured through cost to income ratio.
Reduction in the Net Interest Margins along with an increased cost to income is a negative news for the bank.
risk management:
Regarding the aspect of asset quality HDFC Bank could be considered as the leader in the entire banking segment.
Its Net NPA accounts to 0.31% and the credit cost accounts to 0.35%.
HDFC Bank might start earning better Net Interest Margins and a better Cost to Income factor once the interest rates start going down.
#hdfcbank
Regarding the aspect of asset quality HDFC Bank could be considered as the leader in the entire banking segment.
Its Net NPA accounts to 0.31% and the credit cost accounts to 0.35%.
HDFC Bank might start earning better Net Interest Margins and a better Cost to Income factor once the interest rates start going down.
#hdfcbank
#valuation
#HDFCBANK
We are valuating HDFC Bank using the “Present value of a growing perpetuity”
5yr Average of PAT (5 yrs including TTM) = 40705 cr
With a Discount rate of 7% and Growth rate of 5% the present
value of the growing perpetuity is
40705/(0.07-0.05) = 20,35,250 cr.
If we consider 50% margin of safety then the value will be 10,17,625 cr
The present Market cap of HDFC Bank is 11,31,000 cr.
So, the Bank is fairly valued even after considering the P/E and P/Bv values.
Its said - Buy a Dollar for Penny
its almost same case here.
More correction more value.
not a buy sell recommendation just analysis
#HDFCBANK
#HDFCBANK
We are valuating HDFC Bank using the “Present value of a growing perpetuity”
5yr Average of PAT (5 yrs including TTM) = 40705 cr
With a Discount rate of 7% and Growth rate of 5% the present
value of the growing perpetuity is
40705/(0.07-0.05) = 20,35,250 cr.
If we consider 50% margin of safety then the value will be 10,17,625 cr
The present Market cap of HDFC Bank is 11,31,000 cr.
So, the Bank is fairly valued even after considering the P/E and P/Bv values.
Its said - Buy a Dollar for Penny
its almost same case here.
More correction more value.
not a buy sell recommendation just analysis
#HDFCBANK
Loading suggestions...