CMP: INR1,497 TP: INR1,790 (+20%)

Transcription

1 21 April QFY17 Results Update Sector: Financials HDFC Bank BSE SENSEX S&P CNX 29,365 9,119 Bloomberg HDFCB IN Equity Shares (m) 2,562.6 M.Cap.(INRb)/(USDb) 3,836.6 / Week Range (INR) 1500 / , 6, 12 Rel. Per (%) 4/13/24 Avg Val, INRm 2559 Free float (%) 78.8 Financials & Valuations (INR b) Y/E MARCH E 2019E NII OP NP NIM (%) EPS (INR) EPS Gr. (%) BV/Sh. (INR) ABV/Sh. (INR) RoE (%) RoA (%) Payout (%) Valuations P/E(X) P/BV (X) P/ABV (X) Div. Yield (%) CMP: INR1,497 TP: INR1,790 (+20%) Buy Stellar performance on all fronts HDFC Bank s (HDFCB) 4QFY17 PAT grew 18% YoY (2% beat) to INR39.9b, led by 27% YoY PPoP growth (10% beat). The bank delivered robust loan growth, strong cost control, margins improvement and impeccable asset quality. Loans grew 12% QoQ and 19% YoY to INR5.55t. Note that sequential growth is off a low base due to run-down of FCNR (B) linked loan book in the prior quarter. Domestic loans grew 23.7% YoY in FY17. Incremental growth in the quarter was driven by corporate loans (62% incremental share; 36% of overall loans). In retail loans (+9% QoQ and 22% YoY), the main drivers were credit cards and business banking (+10%/13% QoQ and 27%/43% YoY). For FY17, HDFCB achieved 25% incremental market share of the system. The bank is focusing cutting flab in the system. Further, digitalization is helping reduce the excess workforce. Headcount declined by ~6k (10k in 2H) QoQ, leading to 8% QoQ decline in employee costs. Other highlights: a) Asset quality is impeccable, with NSL less than 50bp. However, HDFCB incurred increased provisioning due NPAs that received RBI dispensation in the prior quarter; b) fees grew 16% YoY and 14% QoQ. Excellent performance by subs: a) HDB Financials loans grew 32% YoY to INR335b and PAT rose 28% YoY for FY17; b) HDFC Securities PAT grew 62% YoY to INR2.2b; PAT margin expanded to 39% from 33% a year ago. Valuation and view: HDFCB is well positioned in the current environment, with 45%+ CASA ratio, opportunities for significant loan market share gains (+80bp YoY to 7%) and least asset quality risk. With tier 1 capital of 13.3%, strong capacity amid the moderate growth cycle and significant digitization initiatives, the bank is well placed to benefit from the expected pick-up in the economic growth cycle. RoE is expected to be ~19-20% in FY We value the bank at 4x FY19 BV. Our target price does not capture value of subsidiaries. Our backof-the-envelope calculation suggests value of INR85/share (3x FY19 BV for HDB Financials and 15x earnings for securities business; 20% Holdco discount). Alpesh Mehta (Alpesh.Mehta@MotilalOswal.com); Subham Banka (Subham.Banka@MotilalOswal.com); Investors are advised to refer through important disclosures made at the last page of the Research Report. Motilal Oswal research is available on Bloomberg, Thomson Reuters, Factset and S&P Capital.

2 Exhibit 1: Quarterly Performance: In-line Y/E March 4QFY17A 4QFY17E V/S our Est Comments Net Interest Income 90,551 85,213 6 NII beat led by better-than-expected loan growth % Change (Y-o-Y) Other Income 34,463 34,266 1 in line Net Income 125, ,479 5 Operating Expenses 52,220 53,006-1 in line Operating Profit 72,794 66, Beat led by stronger than expected NII growth % Change (Y-o-Y) Other Provisions 12,618 7, Provisions significantly higher than expected Profit before Tax 60,176 58,994 2 Tax Provisions 20,275 20,023 1 Net Profit 39,901 38,972 2 In-lne; higher operating profits offset by miss on provisions % Change (Y-o-Y) Domestic loan growth was 23.7% YoY. Corporate loans increased 16% QoQ driven by working capital loans. Retail loan growth remains healthy Loans grew 12% QoQ and 19% YoY to INR5.55t. Note that the sequential growth is off a low base due to run down of FCNR (B) linked loan book in the prior quarter. Domestic loans grew 23.7% YoY in FY17. Incremental growth in the quarter was driven by corporate loans (62% incremental share). The corporate loan book increased 16% QoQ and 12% YoY to INR2.71t. Bulk of the incremental loans was corporate working capital loans. Retail advances, too, witnessed robust growth (9% QoQ, 27% YoY) driven by credit cards (10% QoQ, 27% YoY), personal loans (8% QoQ, 35% YoY) and business banking (13% QoQ and 43% YoY). Exhibit 2: Share of unsecured loans in retail book largely stable QFY13 4QFY13 2QFY14 3QFY14 4QFY14 2QFY15 3QFY15 4QFY15 2QFY16 3QFY16 4QFY16 2QFY17 3QFY17 4QFY17 31% YoY CASA deposit growth. Reported NIM increases 20bp QoQ; CASA ratio shoots up to 48% Margins (reported) increased 20bp sequentially to 4.3% driven by higher credit/deposit ratio and higher share of CASA deposits. Both CA and SA deposits witnessed strong growth in the year (31% each) resulting in a CASA ratio of 48% v/s 43.2% YoY. However, the daily average CASA ratio was lower than the period-end figure. 21 April

3 Strong trading gains led to 8% QoQ increase in other income; fee income growth remains tepid Fee income growth picks up HDFCB reported a pick-up in fee income growth to 16% YoY from 10% YoY in the prior quarter. Overall fee income / average assets increased 10bp to 1.2%. Trading gains moderated in the quarter, given the hardening in GSec yields (INR1.8b, up 56% YoY, down 55% QoQ). Forex income grew 26% YoY. Exhibit 3: Fee income/ average assets (%) remains at multi-year low Fee Inc.(INR b) Fee Inc. as % of Avg. Assets QFY13 4QFY13 2QFY14 3QFY14 4QFY14 2QFY15 3QFY15 4QFY15 2QFY16 3QFY16 4QFY16 2QFY17 3QFY17 4QFY Employee costs declined 8% QoQ due to lower headcount. Operating expenses well under control; Asset quality stable Overall opex growth continued to moderate at 14% YoY (8% QoQ), driven by lower employee expenses (4% YoY, -8% QoQ). Headcount was lower by ~6,000 employees on a sequential basis (84,325 employees at fiscal end). After two quarters of slow branch addition, HDFCB opened 160 new branches in the quarter, taking the total count to branches. As a result, the cost-to-core income ratio improved 50bp QoQ to 41.8%. Asset quality remained stable with GNPA/NNPA of 5%/3%. 4QFY17 Conference Call Highlights Business Updates Emerging corporates segment HDFCB has been expanding into new geographies (100 cities) and gaining share from other banks. HDFCB offers a wide product range with strong transactional banking capabilities. CASA ratio was higher due to float from more capital market activities. Personal loan book has witnessed 30% growth in the past several quarters. This has been driven by better sales process from the front-end. Have a database of 38m customers, which they use to tap potential customers. Penetration level of personal loans from the captive franchise is just in early teens. Fee Income Tough competitive environment for fees Management expects new branch opening per year going forward (compared to earlier). Room to improve on the C/I ratio. Some of the uptick in the corporate book was attributable to one-off large borrowings from existing customers. Have recently tied up with a couple of life insurers and one general insurer. 21 April

4 Asset Quality Of INR12.61b provisions made this quarter, INR2.80b were general provisions for standard assets, while the rest were specific provisions. Note that the bank utilized INR1.50b floating provisions in 4QFY16, hence the YoY increase in provisions looks large. Slippages during the quarter INR20b excluding the INR2.45b from RBI dispensation. Agri and 2W borrowers were affected. No sale to ARC in the quarter The bank managed recoveries from about 25% of accounts that benefited from RBI dispensation in the prior quarter. INR12.48b floating provisions as of 4QFY17. Others HDB 1,151 branches in 815 cities. BS growth of ~30%. GNPL is 1.5%, NNPL is 0.8%. Net worth is ~INR53b. There will be some impact on the P&L from ESOPs due to new accounting standards. 5-6% of loans are on base rate CET 1 ratio = 12.8%. Buy with a target price of INR1,790 (4x FY19E BV) Valuation and view Structural drivers in place with (1) CASA ratio of 45%+, (2) opportunities for the significant market share gains (25% of incremental market share in FY17), (3) improving operating efficiency led by digitalization initiatives, (4) expected traction in income due to strong expansion in branch network, and (5) best-inclass asset quality. Post demon strong improvement in retail loan growth is impressive especially when the bank was focused on cutting flab from the system. Retail loan growth is seeing a strong revival with the contribution from high ROE retail products like unsecured personal loans, LAS and Credit cards going up. Despite the moderate growth in underlying assets like Auto, CV and CE loans HDFCB is seeing the strong loan growth-indicating a market share gain. Sharp pick in corporate loans is impressive. Helped by strong benefit on the cost of funds bank has been aggressive in gaining market share in the corporate loans. We expect the trend to continue considering the large part of the competition is struggling with its own issues like capitalization, asset quality etc. We have seen some moderation in the investments in branches and ATMs and calibration in workforce. In our view, this is largely to improve the productivity from the existing investments and cutting the flab in the system. Core revenue growth is expected to be healthy at 16%+. This along with improving operating efficiencies which will help overall earnings growth to 18%+ in our view. Despite pricing pressure, NIMs moderation is expected to be limited due to a) high CASA ratio, b) benefit of falling rate cycle will occur due to high share of fixed rate retail loans (~65% of book) and c) high-yielding retail loans contribution within retail to rise. Over the last 12 years, HDFCB s market share has increased significantly in (1) retail loans, (2) low-cost deposits and (3) profitability, indicating the strength of its franchisee. Strong fundamentals and near-nil stress loans would enable the 21 April

5 bank to gain market share. Further, continued strong investment in people and branches indicating management positive outlook on business. RoEs are expected to be the best amongst private banks at ~20%. The stock trades at FY19 PBV/PE of 3.3x/18.9x. We value bank at 4x FY19 BV based on residual income model. We roll forward our target price to December 2018 from September 2018 earlier. Our key assumptions are a) Risk free rate of 7% b) Risk premium of 5% c) Beta of 1x d) average growth of ~15% over FY21-37E and 18% over FY17-20and e) terminal growth rate of 5%. Our target price does not capture value of subsidiaries. Our back of the envelope calculation suggest value of INR85/share (3x FY19 BV for HDB Financials and 15x earnings for Securities business; 20% Holdco discount). Exhibit 4: We largely maintain our earnings estimates INR b Old Estimates New Estimates % Change FY18 FY19 FY18 FY19 FY18 FY19 Net Interest Income Other Income Total Income Operating Expenses Operating Profits Provisions PBT Tax PAT Margins (%) Credit Cost (%) RoA (%) RoE (%) EPS BV ABV Exhibit 5: One year forward P/BV 6.0 P/B (x) 5 Yrs Avg(x) 10 Yrs Avg(x) Exhibit 6: One year forward P/E 37 P/E (x) 5 Yrs Avg(x) 10 Yrs Avg(x) Apr-02 Jun-03 Aug-04 Oct-05 Dec-06 Jan-08 Mar-09 May-10 Jul-11 Sep-12 Oct-13 Dec-14 Feb-16 Apr-17 Apr-02 Jun-03 Aug-04 Oct-05 Dec-06 Jan-08 Mar-09 May-10 Jul-11 Sep-12 Oct-13 Dec-14 Feb-16 Apr April

6 Exhibit 7: DuPont Analysis: Risk adjusted NIMs continue to improve; RoAs close to decadal high (%) Y/E March FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E FY20E Net Interest Income Core Fee Income Fee to core Income Core Income Operating Expenses Cost to Core Income Employee cost Employee to total exp Others Core operating Profits Non Interest income Trading and others Operating Profits Provisions NPA Others PBT Tax Tax Rate RoA Leverage (x) RoE Exhibit 8: Exhibit 8: DuPont Analysis: Robust core operating performance continues (%) 4QFY15 2QFY16 3QFY17 4QFY16 2QFY17 3QFY17 4QFY17 NII Fees (ex-forex) Fees to core Inc Core Income Operating Expenses Cost to Core Inc (%) Employee Expenses Other Expenses Core Oper. Profit Trading and others Operating Profit Provisions PBT Tax Tax Rate ROA Leverage (x) ROE April

7 Story in Charts Exhibit 9: Loans grew 19% YoY (12% QoQ) Loans (INR b) YoY Growth (%) Exhibit 10: Deposit growth moderated to 18% QoQ Deposits (INR b) YoY Gr (%) MFY13 FY13 1HFY14 9MFY14 FY14 1HFY15 9MFY15 FY15 1HFY16 9MFY16 FY16 1HFY17 9MFY17 FY17 2,415 2,397 2,586 2,686 2,967 3,030 3,121 3,273 3,471 3,655 3,820 4,185 4,364 4,646 4,706 4,944 4,950 5,546 9MFY13 FY13 1HFY14 9MFY14 FY14 1HFY15 9MFY15 FY15 1HFY16 9MFY16 FY16 1HFY17 9MFY17 FY17 2,841 2,962 3,033 3,130 3,492 3,673 3,721 3,907 4,141 4,508 4,842 5,069 5,240 5,464 5,738 5,917 6,347 6,436 Exhibit 11: Healthy traction in vehicle loans Vehicle Loans (INR b) YoY Growth (%) Exhibit 12: CV/CE loans grew 31% YoY CV and CE loans (INR b) YoY Growth (%) MFY13 FY13 1HFY14 9MFY14 FY14 1HFY15 9MFY15 FY15 1HFY16 9MFY16 FY16 1HFY17 9MFY17 FY MFY13 FY13 1HFY14 9MFY14 FY14 1HFY15 9MFY15 FY15 1HFY16 9MFY16 FY16 1HFY17 9MFY17 FY17 Exhibit 13: Share of retail loans (based on internal classification) ticked lower to 63.8% compared to 65.4% in 3QFY17 Loan Break-up (INR b) YoY % of loans 4QFY17 4QFY16 Gr (%) 3QFY17 QoQ Gr (%) Auto PL LAS Wheerlers CV and CE CC Bus. Banking Home loans Gold loans Kissan gold cards Others Retail loans ,538 2, , Corp and International ,008 1, , Total loans ,546 4, , Exhibit 14: NIMs increased 20bp QoQ to 4.3% QFY13 4QFY13 2QFY14 3QFY14 4QFY14 2QFY15 3QFY15 4QFY15 2QFY16 3QFY16 4QFY16 2QFY17 3QFY17 4QFY17 21 April

8 Exhibit 15: Quarterly fees/assets (%) remained low Fee Inc.(INR b) Fee Inc. as % of Avg. Assets Exhibit 16: GNPA remained stable at 1.1% Gross NPAs (%) Net NPAs (%) QFY13 4QFY13 2QFY14 3QFY14 4QFY14 2QFY15 3QFY15 4QFY15 2QFY16 3QFY16 4QFY16 2QFY17 3QFY17 4QFY MFY13 FY13 1HFY14 9MFY14 FY14 1HFY15 9MFY15 FY15 1HFY16 9MFY16 FY16 1HFY17 9MFY17 FY Exhibit 17: Added 160 branches during the quarter Branch Addition (4 qtr rolling) QFY13 4QFY13 2QFY14 3QFY14 4QFY14 2QFY15 3QFY15 4QFY15 2QFY16 3QFY16 4QFY16 2QFY17 3QFY17 4QFY Exhibit 18: CASA ratio improved 260 bp to 48% CASA Deposits (INR b) CASA Ratio (%) MFY13 FY13 1HFY14 9MFY14 FY14 1HFY15 9MFY15 FY15 1HFY16 9MFY16 FY16 1HFY17 9MFY17 FY17 21 April

9 Exhibit 19: Quarterly Snapshot FY15 FY16 FY17 Variation (%) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q QoQ YoY Profit and Loss (INR m) Net Interest Income 51,716 55,110 56,999 60,132 63,888 66,809 70,685 74,533 77,814 79,936 83,091 90, Other Income 18,506 20,471 25,349 25,638 24,619 25,518 28,722 28,659 28,066 29,010 31,427 34, Trading profits ,655 1,961 1,259 1,624 3,279 1,155 2,769 2,835 3,986 1, Exchange Profits 2,242 2,217 2,534 3,287 3,480 3,196 2,774 2,828 3,145 2,950 2,972 3, Others (Ex non core) 16,014 17,303 20,160 20,390 19,880 20,698 22,669 24,676 22,152 23,225 24,469 29, Total Income 70,222 75,581 82,348 85,769 88,507 92,327 99, , , , , , Operating Expenses 31,784 34,979 34,563 38,550 40,008 41,898 42,048 45,843 47,689 48,700 48,425 52, Employee 11,259 11,669 11,325 13,256 13,590 14,140 14,313 14,980 15,852 16,572 16,886 15, Others 20,525 23,310 23,238 25,294 26,418 27,758 27,736 30,863 31,837 32,128 31,539 36, Operating Profits 38,438 40,602 47,786 47,220 48,499 50,429 57,359 57,349 58,192 60,246 66,093 72, Provisions 4,828 4,559 5,604 5,767 7,280 6,813 6,539 6,625 8,667 7,490 7,158 12, PBT 33,610 36,043 42,181 41,453 41,219 43,616 50,820 50,725 49,525 52,756 58,935 60, Taxes 11,280 12,228 14,236 13,384 14,262 14,922 17,251 16,982 17,136 18,202 20,281 20, PAT 22,330 23,815 27,945 28,069 26,957 28,695 33,568 33,742 32,389 34,553 38,653 39, Asset Quality GNPA 33,562 33,617 34,679 34,384 38,522 38,278 42,552 43,928 49,209 50,690 52,323 58, NNPA 10,074 9,173 9,037 8,963 10,277 10,377 12,606 13,204 14,934 14,889 15,643 18, GNPA (%) NNPA (%) PCR (Calculated, %) Ratios (%) Fees to Total Income Cost to Core Income Tax Rate CASA (Reported) Loan/Deposit RoA RoE Margins (%) - Calculated Yield on loans Yield On Investments Yield on funds Cost of funds Spreads Margins Margins (%) - Reported April

10 Exhibit 20: Quarterly Snapshot continued FY15 FY16 FY17 Variation (%) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q QoQ YoY Balance Sheet (INR b) ESC Reserves and Surplus Net Worth Deposits 3,721 3,907 4,141 4,508 4,842 5,069 5,240 5,464 5,738 5,917 6,347 6, Borrowings+Sub Debt Other Liabiliites Total Liabilities 4,914 5,100 5,349 5,905 6,293 6,600 6,879 7,088 7,551 7,888 8,280 8, Cash Money at call Investments 1,088 1,154 1,196 1,516 1,724 1,713 1,823 1,639 2,063 2,067 2,361 2, Advances 3,121 3,273 3,471 3,655 3,820 4,185 4,364 4,646 4,706 4,944 4,950 5, Total earning assets 4,290 4,540 4,788 5,260 5,687 5,976 6,245 6,373 6,888 7,189 7,352 7, Fixed Assets Other Assets Total Assets 4,914 5,100 5,349 5,905 6,293 6,600 6,879 7,088 7,551 7,888 8,280 8, Loan Break Up (%) Retail Auto Loans Personal Loans Loan against securities Two wheeler CV & CE Credit Cards Business Banking Home loans Gold loans Kissan Gold Cards Other Retail loans Corp. & International Franchise Branches 3,488 3,600 3,659 4,014 4,101 4,227 4,281 4,520 4,541 4,548 4,555 4, ATM 11,428 11,515 11,633 11,766 11,952 11,666 11,843 12,000 12,013 12,016 12,087 12, April

11 Exhibit 21: Valuation metrics Rating 66 CMP Mcap EPS (INR) P/E (x) BV (INR) P/BV (x) RoA (%) RoE (%) FY19E (INR) (USDb) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E ICICIBC* Buy HDFCB Buy 1, AXSB Neutral KMB* Buy YES Buy 1, IIB Buy 1, IDFC Bk Neutral FB Buy DCBB Neutral JKBK Neutral SIB Neutral Equitas Buy RBL Under Review Private Aggregate SBIN (cons)* Buy PNB Buy BOI Neutral BOB Buy CBK Neutral UNBK Neutral OBC Neutral INBK Buy Public Aggregate Banks Aggregate HDFC* Buy 1, LICHF Buy IHFL Buy GRHF Neutral REPCO Buy DEWH Buy Housing Finance RECL Neutral POWF Neutral Infra Finance SHTF Buy 1, MMFS Buy BAF Buy 1, SCUF Buy 2, , MUTH Buy SKSM Neutral Asset Finance NBFC Aggregate Financials 21 April

12 Financials and Valuations Income Statement (INR Million) Y/E March E 2019E 2020E Interest Income 350, , , , , , ,919 1,152,312 Interest Expense 192, , , , , , , ,910 Net Interest Income 158, , , , , , , ,402 Change (%) Non Interest Income 68,526 79,196 89, , , , , ,307 Net Income 226, , , , , , , ,709 Change (%) Operating Expenses 112, , , , , , , ,548 Pre Provision Profits 114, , , , , , , ,161 Change (%) Provisions (excl tax) 16,770 15,880 20,758 27,256 35,933 41,814 54,769 72,637 PBT 97, , , , , , , ,524 Tax 30,249 42,937 51,128 63,417 75,894 86, , ,643 Tax Rate (%) PAT 67,257 84, , , , , , ,881 Change (%) Equity Dividend (Incl tax) 15,360 19,275 24,142 28,790 33,755 40,080 47,397 56,125 Core PPP* 97, , , , , , , ,432 Change (%) *Core PPP is (NII+Fee income-opex) Balance Sheet (INR Million) Y/E March E 2019E 2020E Equity Share Capital 4,759 4,798 5,013 5,056 5,125 5,125 5,125 5,125 Reserves & Surplus 357, , , , , ,507 1,143,532 1,328,288 Net Worth 362, , , , , ,632 1,148,657 1,333,413 Deposits 2,962,470 3,673,375 4,507,956 5,464,242 6,436,397 7,852,404 9,658,457 11,976,486 Change (%) of which CASA Dep 1,405,215 1,646,214 1,984,921 2,363,108 3,091,530 3,613,047 4,407,917 5,377,658 Change (%) Borrowings 330, , , , , , ,972 1,030,727 Other Liabilities & Prov. 348, , , , , , , ,937 Total Liabilities 4,003,319 4,915,995 5,905,031 7,088,456 8,638,402 10,323,262 12,481,286 15,209,563 Current Assets 272, , , , , , , ,632 Investments 1,116,136 1,209,511 1,516,418 1,638,858 2,144,633 2,530,667 2,986,188 3,523,701 Change (%) Loans 2,397,206 3,030,003 3,654,950 4,645,940 5,545,682 6,765,732 8,254,193 10,235,199 Change (%) Fixed Assets 27,031 29,399 31,217 33,432 36,268 39,768 45,268 50,768 Other Assets 190, , , , , , , ,263 Total Assets 4,003,319 4,915,995 5,905,031 7,088,456 8,638,402 10,323,262 12,481,286 15,209,563 Asset Quality (%) Y/E March E 2017E 2018E 2016E 2016E GNPA (INR m) 23,346 29,893 34,384 43,928 58,924 81, , ,618 NNPA (INR m) 4,690 8,200 8,963 13,204 17,625 22,882 29,631 39,857 GNPA Ratio NNPA Ratio PCR (Excl Tech. write off) E: MOSL Estimates 21 April

13 Financials and Valuations Ratios Y/E March E 2019E 2020E Spreads Analysis (%) Avg. Yield-Earning Assets Avg. Yield on loans Avg. Yield on Invt Avg. Cost-Int. Bear. Liab Avg. Cost of Deposits Interest Spread Net Interest Margin Profitability Ratios (%) RoE RoA Int. Expense/Int.Income Fee Income/Net Income Non Int. Inc./Net Income Efficiency Ratios (%) Cost/Income* Empl. Cost/Op. Exps Busi. per Empl. (INR m) NP per Empl. (INR lac) * ex treasury Asset-Liability Profile (%) Loans/Deposit CASA Ratio Investment/Deposit CAR Tier Valuation Book Value (INR) Change (%) Price-BV (x) Adjusted BV (INR) Price-ABV (x) EPS (INR) Change (%) Price-Earnings (x) Dividend Per Sh (INR) Dividend Yield (%) E: MOSL Estimates 21 April

14 Corporate profile Company description HDFC Bank was amongst the ten private sector bank which were awarded license post liberalization of 1990s. The bank was incorporated in August 1994 and is promoted by the biggest mortgage lender in the country, HDFC Limited (18.8% stake). The bank is now the second largest private sector bank in India with asset size of INR6t+ and market share of ~5% in deposit and loans respectively. As on March 31, 2017, the bank had a network of 4,715 branches and 12,260 ATMs spread across the country. Exhibit 1: Sensex rebased Source: MOSL/Bloomberg Exhibit 2: Shareholding pattern (%) Dec-16 Sep-16 Dec-15 Promoter DII FII Others Note: FII Includes depository receipts Source: Capitaline Exhibit 3: Top holders Holder Name % Holding Europacific Growth Fund 3.9 LIC of India 2.2 ICICI Prudential Value Discovery Fund 1.6 ICICI Prudential Life Insurance Company Ltd 1.5 Capital World Growth and Income Fund 1.5 Source: Capitaline Exhibit 4: Top management Name Designation Exhibit 5: Directors Name Name Shyamala Gopinath Chairperson A N Roy Bobby Parikh Aditya Puri Paresh Sukthankar Kaizad Bharucha Managing Director Deputy Managing Director Executive Director K M Mistry Partho S Datta Srikanth Nadhamuni Malay Patel Renu Karnad Umesh Chandra Sarangi Sanjay Dongre Company Secretary Source: Capitaline *Independent Exhibit 6: Auditors Name Deloitte Haskins & Sells Type Statutory Source: Capitaline Exhibit 7: MOSL forecast v/s consensus EPS MOSL Consensus (INR) forecast forecast Variation (%) FY FY FY Source: Bloomberg 21 April

15 N O T E S 21 April

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