26 October 2016
2QFY17 Results Update | Sector: Financials
HDFC Bank
Buy
BSE SENSEX
28,091
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
8,691
HDFCB IN
2,528.2
3,105 / 46.2
1318 / 929
-3/3/11
1638
78.7
CMP: INR1,250
TP: INR1,500 (+20%)
Loan growth moderates to 18% YoY; RoA steady at 1.8%
HDFC Bank's (HDFCB) 2QFY17 PAT grew 20% YoY (in-line) to INR34.6b, driven
by healthy core PPoP growth (+20% YoY). Key highlights of the quarter were: a)
corporate loan growth slowed to 13% YoY on account of higher repayments of
short-term loans; b) reported NIM declined 20bp QoQ to 4.2%; c) strong retail
loan growth (+24% YoY); and d) moderation in fee growth (12.6% YoY).
Retail loan book grew robustly by 23.5% YoY, driven by strong growth in auto
loans (23% YoY), personal loans (40% YoY) and agricultural loans (35% YoY).
Growth in business banking (15% YoY) picked up after a lackluster 1Q.
However, intense competition in the retail segment impacted fee income
growth.
CASA deposits grew 19% YoY, driven by SA (+22% YoY). CASA ratio was largely
stable YoY at ~40%. Over past one year, branch count has grown 8%.
Other highlights:
a) Absolute GNPA increased 3% QoQ, with slippage ratio
declining to 1.4%; b) CET1 ratio remained healthy at 13.3% (stable QoQ); and c)
NSL remained the lowest at 40bp. d) HDFCB opened 7 branches in the quarter,
compared to 506 branches opened in FY16.
Valuation and view:
HDFCB is well positioned in the current environment with
~40% CASA ratio, growth outlook of at least 1.3x industry and least asset quality
risk. With CET1 of ~13.3%, strong capacity building amid moderate growth cycle
(branches at 4,548 v/s 1,412 in FY09) and significant digitalization initiatives, the
bank is well placed to benefit from the expected pick-up in economic growth cycle.
RoE is expected to be ~19-20% in FY17-19. Maintain
Buy
with a target price of
INR1,500 (3.6x Sep 2018E BV) based on RI model.
Financials & Valuation (INR b)
Y/E Mar
2016 2017E 2018E
NII
275.9 335.5 399.2
OP
213.6 256.8 306.3
NP
123.0 147.8 177.6
NIM (%)
4.7
4.8
4.7
EPS (INR)
48.6
58.4
70.2
EPS Gr. (%)
19.3
20.2
20.2
BV/Sh. (INR)
287
332
386
ABV/Sh. (INR)
284
326
379
RoE (%)
18.3
18.9
19.6
RoA (%)
1.9
1.9
1.9
P/E(X)
25.2
21.0
17.5
P/BV (X)
4.3
3.7
3.2
P/ABV (X)
4.3
3.8
3.2
Div. Yield (%)
0.8
1.0
1.1
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415
Sohail Halai
(Sohail.Halai@MotilalOswal.com); +91 22 3982 5505
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

HDFC Bank
Exhibit 1: Quarterly Performance: In-line with estimate
Y/E March
Net Interest Income
% Change (Y-o-Y)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
2QFY17A
79,936
20
29,010
108,945
48,700
60,246
19
7,490
52,756
18,202
34,553
20
2QFY17E
83,056
24
30,017
113,073
50,530
62,544
24
10,500
52,044
17,565
34,479
20
V/S our Est
-4
-3
-4
-4
-4
-29
1
4
0
Comments
Loan growth marginally lower than expected; NIMs decline
20bp QoQ
Non-core income miss; Fees moderate
Slow down in branch and ATM expansion
Operating leverage help boost profitability
Asset quality stable QoQ
Lower provisions compensate for miss on core income
Source: Company, MOSL
Retail loan book grew
23.5% YoY
Robust loan growth driven by retail segment
Loan growth moderated to 18% YoY as compared to 23% YoY in 1QFY17. This
was on account of slower growth in the corporate book.
Retail loan book growth was a robust 23.5% YoY driven by strong growth in auto
loans (23% YoY), personal loans (40% YoY) and agricultural loans (35% YoY).
Growth in business banking picked up after a lackluster 1Q.
Growth in the corporate book was a moderate 13% YoY (2% QoQ). Intense
competition for WC refinancing of better-rated corporates as well as higher
repayment of short-term loans by corporates contributed to the slowdown in
the corporate loan growth.
Exhibit 2: Share of unsecured loans inched up higher to 13.4% of retail book
13.4
11.5
10.6
10.7
11.3
12.0
12.4
Source: MOSL, Company
CASA ratio improves 50bp
sequentially to 40.4%
Reported NIM declined 20bp QoQ; CASA ratio remains healthy above 40%
Reported NIM declined 20bp QoQ to 4.2%.
Management attributed 10bps decline on account of one-time change in
calculation methodology as well as excess liquidity held by the bank during the
quarter.
We believe the sharp increase in borrowings (up 47% YoY), and slower CA
growth would have also put upside pressure on cost of funds.
CA/SA deposit growth was robust at 13%/22% YoY. As a result, CASA ratio
increased 50bp sequentially to 40.4%
25 October 2016
2

HDFC Bank
Fee growth moderates to
12.6% YoY
Fee income growth moderates
HDFCB reported fee income growth of +12.6% YoY (6% QoQ) – lower than
balance sheet growth. Overall fee income / average assets now stand at 1.09%.
Intense competition in the retail segment impacted fee income growth.
Given sharp decline in G-Sec yields, HDFCB continues to witness strong trading
gains (INR2.8b, up 75% YoY). Forex income de-grew 8% YoY, in line with the
trend witnessed in the past few quarters.
Non-interest income to total income remained sequentially stable at 26.6% on
account of strong trading gains.
Exhibit 3: Fee income/ Avg. assets (%) remains at multi-year lows
Fee Inc.(INR b)
1.3 1.5
1.4
1.3
1.3
1.4
1.3
1.2
Fee Inc. as % of Avg. Assets
1.4
1.3
1.2
1.2
1.1
1.1
1.2
1.1
1.1
Source: MOSL, Company
HDFCB added just 7
branches in 2QFY17
compared with 21 branches
in 1QFY17 and 506
branches in FY16
Branch addition slows down; Asset quality stable
Overall opex growth moderated to 16% YoY, down from the average of 18-20%
witnessed in the past several quarters.
The bank added a mere 7 branches during the quarter, taking the total branch
count to 4,548 branches.
As a result, the cost-to-income ratio declined 30bp YoY and 40bp QoQ to 46.9%
Asset quality remained stable with GNPA/NNPA of 1.02%/0.3%. Slippage ratio
declined from 2.1% in 1QFY17 to 1.4% in 2QFY17.
25 October 2016
3

HDFC Bank
2QFY17 Conference Call Highlights
Balance sheet related
Overall Cost of FCNR deposits ~8.5% (including swap costs)
Lower loan growth is seen on the corporate book (~18%YoY) because of higher
repayment during the quarter. However, the retail book has demonstrated
healthy growth.
The bank is seeing significant opportunities in SME space and the Business
banking segment is also primed to grow especially with the added geographical
footprint.
P/L related
NIM declined on a sequential basis: NIM decline 20bp QoQ – 10bp reflects the
change in calculation (whereby there is an increase in the denominator) , part of
the NIM contraction reflects the excess liquidity parked by the bank.
HDFCB has done some PSLC in the quarter. The bank has been both buyer and
seller in the sub limits within PSL. However, the bank does not see this as a
challenge as the bank had been doing PSL internally (qualified portfolio
acquisitions to meet PSL targets) for a while. Will not have significant impact on
margins.
Intense Competition in high quality large corporate lending. Retail competition
is reflected in loan yields as well as in terms of fee income (such as loan
processing fees etc). With MCLR banks have become more price competitive
No floating provisions made during the quarter.
While fee income growth has been in low teens, the quality of fee income is
granular with almost no incremental capital consumption in generating these
fees. Most of the fees are transactional in nature.
Asset quality
This particular quarter has not seen any incremental asset quality challenges in
the SME space.
Provisions for the quarter INR7.5b, INR6.5b specific, INR1b was general
Incremental lending to infra sector – Bank primarily looking at
refinancing opportunity where project risk is complete.
The bank is not targeting any particular segment or sector. The book is well
diversified and the management will opportunistically lend to segments where
there is a large credit appetite (consumption is seeing substantial demand)
Slippage during 2Q was INR14b - 1.4% annualized, recovery and upgrade -
INR7.6b
There will be some decline in investment yields (part of it led by excess liquidity
parked in low yielding ST instruments)
Others
Some pick up in the credit card segment in this quarter (as there is an element
of seasonality in this product)
There has been significant growth in branches in the past few years. Going
forward, branch addition will be slower. Management is comfortable with the
territories covered and footprint.
25 October 2016
4

HDFC Bank
RWA at INR5.7tn
Around 4,200 employees were added during the quarter, taking the staff count
to ~95,000 at the end of 2QFY17.
Valuation and view
Buy with a target price of
INR1,500 (3.6x Sep 18E BV)
Structural drivers in place with (1) CASA ratio of ~40%, (2) growth outlook of at
least 1.3x the industry growth, (3) improving operating efficiency led by
digitalization initiatives, (4) expected traction in income due to strong expansion
in branch network, and (5) best-in-class asset quality.
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.
Led by strong loan growth, revenue growth remains very healthy at 20%+ over
last seven quarter, which is giving bank avenues to expand aggressively
(branches up 11% YoY, headcount up 12% YoY) and invest in the digitalization
without much impact on cost ratios (C/I ratio remains in the range of 45-47%).
With growth momentum remaining healthy, core revenues are expected to
remain 20%+ from hereon.
Despite pricing pressure, NIMs are expected to remain at the current levels as a)
CASA growth will pick up, b) benefit of falling rate cycle will occur due to high
share of fixed rate retail loans (~70% of book) and c) high-yielding retail loans
contribution will rise.
The biggest risk to earnings for private financials is the implementation of
dynamic provisioning by RBI, wherein HDFCB is best placed due to floating
provisions created during the last three years. HDFCB carries floating provisions
of INR13b+—created to reduce volatility in earnings growth led by better-than-
factored credit cost on retail loans.
Earnings CAGR of 20% (best amongst the large private banks), with core income
growth pick-up led by healthy loan growth, superior NIMs, gradual improvement
in fee income and operating efficiencies led by digital initiatives .
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
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
FY18 PBV/PE of 3.2x/17.8x.
We maintain Buy with a target price of INR1450 (3.8x PBV FY18)
based on the
residual income growth model. We introduce FY19 estimates and roll forward
target price to FY18. Our key assumptions are a) Risk free rate of 7.5% b) Risk
premium of 5% c) Beta of 0.9x d) average growth of ~15% over FY16-36E and e)
terminal growth rate of 5%.
25 October 2016
5

HDFC Bank
Exhibit 4:
We largely maintain our earnings estimate
INR b
Net Interest Income
Other Income
Total Income
Operating Expenses
Operating Profits
Provisions
PBT
Tax
PAT
Loans
Deposits
Margins (%)
Credit Cost (%)
RoA (%)
RoE (%)
EPS
BV
ABV
Old Estimates
FY17 FY18
FY19
335.5 399.2 484.4
126.2 148.8 175.8
461.6 548.0 660.2
204.9 241.7 285.3
256.8 306.3 375.0
33.7
39.2
55.9
223.0 267.1 319.1
75.3
89.5
105.3
147.8 177.6 213.8
5,668 7,028 8,715
6,557 8,131 10,082
4.8
4.7
4.6
0.6
0.7
0.7
1.9
1.9
1.9
18.9
19.6
20.2
58
70
85
332
386
451
326
379
439
New Estimates
FY17 FY18 FY19
322.6 383.7 462.1
123.5 145.8 172.3
446.1 529.5 634.4
195.8 228.5 266.5
250.2 301.0 367.9
27.5
33.8
49.4
222.8 267.2 318.5
75.0
89.5 105.1
147.8 177.7 213.4
5,482 6,688 8,293
6,339 7,733 9,589
4.7
4.6
4.6
0.6
0.6
0.6
1.9
1.9
1.9
18.9
19.6
20.2
58
70
84
332
386
451
326
378
437
% Change
FY17 FY18 FY19
-3.9
-3.9
-4.6
-2.1
-2.1
-2.0
-3.4
-3.4
-3.9
-4.4
-5.5
-6.6
-2.5
-1.7
-1.9
-0.1
-0.4
0.0
-3.3
-3.3
0.0
0.0
0.0
-4.8
-4.9
-0.2
-0.2
-0.2
-4.8
-4.9
0
0
0
0
0
0
0
0
0
Source: Company, MOSL
Exhibit 5: One year forward P/BV
Exhibit 6: One year forward P/E
Source: Company, MOSL
Source: Company, MOSL
25 October 2016
6

HDFC Bank
Exhibit 7: DuPont Analysis: Strong improvement in risk adjusted NIMs and operating leverage; RoAs close to decadal high (%)
Y/E March
Interest Income
Interest Expended
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
FY09
10.5
5.6
4.85
1.46
23.1
6.31
3.76
59.6
1.41
37.61
2.35
2.55
2.34
0.88
3.43
1.34
1.25
0.10
2.09
0.67
32.0
1.42
11.9
16.9
FY10
8.1
3.8
4.28
1.49
25.9
5.77
3.19
55.3
1.13
35.35
2.06
2.58
2.25
0.76
3.34
1.23
1.13
0.10
2.11
0.66
31.3
1.45
11.1
16.1
FY11
8.2
3.8
4.40
1.39
24.0
5.79
3.11
53.8
1.13
36.45
1.98
2.67
1.98
0.59
3.27
0.94
0.48
0.46
2.33
0.76
32.5
1.57
10.7
16.7
FY12
9.1
4.9
4.19
1.37
24.6
5.56
3.02
54.3
1.11
36.65
1.91
2.54
1.88
0.51
3.05
0.61
0.35
0.26
2.44
0.76
31.2
1.68
11.1
18.7
FY13
9.5
5.2
4.28
1.34
23.9
5.63
3.04
54.1
1.07
35.29
1.97
2.58
1.86
0.51
3.10
0.45
0.33
0.12
2.64
0.82
31.0
1.82
11.2
20.3
FY14
9.2
5.1
4.14
1.30
23.8
5.44
2.70
49.6
0.94
34.70
1.76
2.74
1.78
0.48
3.22
0.36
0.37
-0.01
2.86
0.96
33.6
1.90
11.2
21.3
FY15
9.0
4.8
4.14
1.23
22.9
5.37
2.59
48.1
0.88
33.97
1.71
2.79
1.66
0.43
3.22
0.38
0.32
0.07
2.83
0.94
33.4
1.89
10.3
19.4
FY16
9.3
5.0
4.25
1.23
22.4
5.48
2.61
47.7
0.88
33.58
1.74
2.86
1.65
0.43
3.29
0.42
0.33
0.09
2.87
0.98
34.0
1.89
9.6
18.3
FY17E
8.9
4.7
4.19
1.19
22.1
5.38
2.54
47.3
0.84
33.20
1.70
2.83
1.60
0.42
3.25
0.36
0.38
-0.02
2.89
0.97
33.7
1.92
9.8
18.9
FY18E
8.7
4.5
4.20
1.18
22.0
5.38
2.50
46.5
0.84
33.58
1.66
2.88
1.59
0.41
3.29
0.37
0.40
-0.03
2.92
0.98
33.5
1.94
10.1
19.6
FY19E
8.8
4.6
4.17
1.15
21.7
5.33
2.41
45.2
0.82
33.96
1.59
2.92
1.56
0.40
3.32
0.45
0.41
0.04
2.88
0.95
33.0
1.93
10.5
20.2
Source: Company, MOSL
Exhibit 8: DuPont Analysis: Robust core operating performance continues (%)
1QFY15
NII
4.21
Fees (ex-forex)
1.14
Fees to core Inc
27.2
Core Income
5.35
Operating Expenses
2.59
Cost to Core Inc (%)
48.3
Employee Expenses
0.92
Other Expenses
1.67
Core Oper. Profit
2.77
Trading and others
0.36
Operating Profit
3.13
Provisions
0.39
PBT
2.74
Tax
0.92
Tax Rate
33.6
ROA
1.82
Leverage (x)
11.0
ROE
20.0
2QFY15
4.40
1.23
27.9
5.63
2.79
49.6
0.93
1.86
2.84
0.41
3.24
0.36
2.88
0.98
33.9
1.90
10.6
20.1
3QFY15
4.36
1.38
31.7
5.75
2.65
46.0
0.87
1.78
3.10
0.56
3.66
0.43
3.23
1.09
33.8
2.14
10.4
22.3
4QFY15
4.27
1.30
30.5
5.58
2.74
49.1
0.94
1.80
2.84
0.52
3.36
0.41
2.95
0.95
32.3
2.00
9.9
19.8
1QFY16
4.19
1.12
26.8
5.31
2.62
49.4
0.89
1.73
2.69
0.49
3.18
0.48
2.70
0.94
34.6
1.77
9.6
17.0
2QFY16
4.15
1.16
28.0
5.30
2.60
49.0
0.88
1.72
2.71
0.42
3.13
0.42
2.71
0.93
34.2
1.78
9.7
17.2
3QFY16
4.20
1.19
28.4
5.39
2.50
46.3
0.85
1.65
2.89
0.51
3.40
0.39
3.02
1.02
33.9
1.99
9.6
19.1
4QFY16
4.27
1.24
29.1
5.51
2.63
47.6
0.86
1.77
2.89
0.40
3.28
0.38
2.91
0.97
33.5
1.93
9.7
18.7
1QFY17
4.25
1.08
25.4
5.33
2.61
48.9
0.87
1.74
2.73
0.45
3.18
0.47
2.71
0.94
34.6
1.77
9.8
17.4
2QFY17
4.14
1.09
26.3
5.23
2.52
48.2
0.86
1.66
2.71
0.41
3.12
0.39
2.73
0.94
34.5
1.79
9.8
17.6
Source: Company, MOSL
25 October 2016
7

HDFC Bank
Story in charts
Exhibit 9: Loans grew 5% QoQ (+18% YoY)
Loans (INR b)
20 20 22 22 22 23 24 23 21 16 23
26
YoY Growth (%)
21 22 17 21 22 28 26 2723 18
Exhibit 10: Deposit growth moderates to 17% YoY
Deposits (INR b)
15
18 21 18 22 19 22 20 18
YoY Gr (%)
30 30 27
21 19 17
14
23 24 23 25 19 23
Source: Company, MOSL
Source: Company, MOSL
Exhibit 11: Healthy traction in vehicle loan growth continues
Vehicle Loans (INR b)
29
24
30 30
26
21 19
YoY Growth (%)
19 19
22 22 19 20
Exhibit 12: CV/CE grew 8% QoQ (+12% YoY)
CV and CE loans (INR b)
YoY Growth (%)
17
9 9
2 -1
5 7
13
Source: Company, MOSL
Source: Company, MOSL
Exhibit 13: Share of retail loans (based on internal
classification) ticked higher to 63.4% v/s 62.4% in FY16
% of
YoY Gr
QoQ Gr
2QFY17 2QFY16
1QFY17
(%)
(%)
Loan Break-up (INR b) loans
Auto
13.0 644
536
20.1
596
8.2
PL
9.1
450
324
38.9
411
9.7
LAS
0.4
21
15
34.8
19
8.8
2Wheerlers
1.4
71
58
23.5
66
7.6
CV and CE
6.8
336
290
15.8
315
6.7
CC
4.3
213
180
18.5
213
0.4
Bus. Banking
13.3 658
575
14.4
604
8.9
Home loans
6.8
336
285
17.9
336
-0.1
Gold loans
1.0
51
43
17.1
49
4.5
Kissan gold cards
5.0
249
195
27.3
224
11.1
Others
3.3
163
121
35.0
152
7.4
Retail loans
64.5 3,191 2,622 21.7 2,983 7.0
Corp and International 35.5 1,753 1,563 12.1 1,723 1.7
Total loans
100.0 4,944 4,185 18.1 4,706 5.1
Source: Company, MOSL
Exhibit 14: NIMs decrease 20bp QoQ (stable YoY,%)
4.6 4.6
4.4
4.3
4.3
4.4 4.4
4.2
4.5
4.4 4.4
4.4
4.2
4.3
4.2
4.3 4.3
Source: Company, MOSL
25 October 2016
8

HDFC Bank
Exhibit 15: Quarterly fees/assets (%) at multi-year low
Fee Inc.(INR b)
Fee Inc. as % of Avg. Assets
Exhibit 16: Asset quality remains under check
Gross NPAs (%)
Net NPAs (%)
1.4 1.3
1.3 1.5 1.4 1.3 1.3 1.4 1.3
1.1 1.2
1.1 1.2 1.2 1.2 1.1 1.1
Source: Company, MOSL
Source: Company, MOSL
Exhibit 17: Branch additions moderate; bank added just 7
branches during the quarter
700
600
500
400
300
200
100
0
Branch Addition (4 qtr rolling)
631
622
440
323
321
Exhibit 18: CASA ratio remains stable QoQ (%)
CASA Deposits (INR b)
CASA Ratio (%)
Source: Company, MOSL
Source: Company, MOSL
25 October 2016
9

HDFC Bank
Exhibit 19: Quarterly Snapshot
FY15
1Q
Profit and Loss (INR m)
Interest Income
Loans
Investment
Others
Interest Expenses
Net Interest Income
Other Income
Trading profits
Exchange Profits
Others (Ex non core)
Total Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
PAT
Asset Quality
GNPA
NNPA
GNPA (%)
NNPA (%)
PCR (Calculated, %)
PCR (Reported, %)
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
112,201
87,351
21,269
3,581
60,485
51,716
18,506
250
2,242
16,014
70,222
31,784
11,259
20,525
38,438
4,828
33,610
11,280
22,330
33,562
10,074
1.1
0.3
70.0
FY16
3Q
4Q
130,064
98,287
28,410
3,367
69,932
60,132
25,638
1,961
3,287
20,390
85,769
38,550
13,256
25,294
47,220
5,767
41,453
13,384
28,069
34,384
8,963
0.9
0.2
73.9
FY17
3Q
4Q
159,968
119,489
37,896
2,583
85,434
74,533
28,659
1,155
2,828
24,676
103,192
45,843
14,980
30,863
57,349
6,625
50,725
16,982
33,742
43,928
13,204
0.9
0.3
69.9
2Q
118,476
90,739
24,071
3,667
63,366
55,110
20,471
951
2,217
17,303
75,581
34,979
11,669
23,310
40,602
4,559
36,043
12,228
23,815
33,617
9,173
1.0
0.3
72.7
1Q
140,411
104,471
32,813
3,126
76,523
63,888
24,619
1,259
3,480
19,880
88,507
40,008
13,590
26,418
48,499
7,280
41,219
14,262
26,957
38,522
10,277
1.0
0.3
73.3
2Q
1Q
165,160
124,708
38,092
2,360
87,346
77,814
28,066
2,769
3,145
22,152
105,881
47,689
15,852
31,837
58,192
8,667
49,525
17,136
32,389
49,209
14,934
1.0
0.3
69.7
2Q
170,699
129,014
38,181
3,505
90,764
79,936
29,010
2,835
2,950
23,225
108,945
48,700
16,572
32,128
60,246
7,490
52,756
18,202
34,553
50,690
14,889
1.0
0.3
70.6
Variation (%)
QoQ YoY
3
3
0
49
4
3
3
2
-6
5
3
2
5
1
4
-14
7
6
7
3
0
-2
-2
98
16
18
12
-18
12
20
14
75
-8
12
18
16
17
16
19
10
21
22
20
32
43
11
5
-226
123,958
95,432
24,836
3,691
66,959
56,999
25,349
2,655
2,534
20,160
82,348
34,563
11,325
23,238
47,786
5,604
42,181
14,236
27,945
34,679
9,037
1.0
0.3
73.9
147,725 154,111
109,483 114,835
33,977
36,514
4,265
2,762
80,916
83,426
66,809
70,685
25,518
28,722
1,624
3,279
3,196
2,774
20,698
22,669
92,327
99,407
41,898
42,048
14,140
14,313
27,758
27,736
50,429
57,359
6,813
6,539
43,616
50,820
14,922
17,251
28,695
33,568
38,278
10,377
0.9
0.3
72.9
42,552
12,606
1.0
0.3
70.4
22.8
45.4
33.6
43.0
83.9
1.8
20.0
11.4
7.4
10.4
5.9
4.4
4.8
4.4
22.9
46.9
33.9
43.2
83.8
1.9
20.1
11.4
8.6
10.7
6.0
4.7
5.0
4.5
24.5
43.4
33.8
40.9
83.8
2.1
22.3
11.3
8.5
10.6
6.1
4.6
4.9
4.4
23.8
46.0
32.3
44.0
81.1
2.0
19.8
11.0
8.4
10.4
5.9
4.5
4.8
4.4
22.5
45.9
34.6
39.6
78.9
1.8
17.0
11.2
8.1
10.3
6.0
4.3
4.7
4.3
22.4
46.2
34.2
40.0
82.6
1.8
17.2
10.9
7.9
10.1
5.9
4.2
4.6
4.2
22.8
43.7
33.9
40.0
83.3
2.0
19.1
10.7
8.3
10.1
5.8
4.3
4.6
4.3
23.9
44.9
33.5
43.0
85.0
1.9
18.7
10.6
8.8
10.1
5.8
4.4
4.7
4.3
20.9
46.2
34.6
39.9
82.0
1.8
17.4
10.7
8.2
10.0
5.6
4.3
4.7
4.4
21.3
45.9
34.5
40.0
83.6
1.8
17.6
10.7
7.4
9.7
5.5
4.2
4.5
4.2
3
-84
-26
-9
-17
-15
-20
-25
-51
-43
-40
-3
-4
-2
Source: Company, MOSL
25 October 2016
10

HDFC Bank
Exhibit 20: Quarterly Snapshot continued
FY15
1Q
Balance Sheet (INR b)
ESC
Reserves and Surplus
Net Worth
Deposits
Borrowings+Sub Debt
Other Liabiliites
Total Liabilities
Cash
Money at call
Investments
Advances
Total earning assets
Fixed Assets
Other Assets
Total Assets
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
ATM
% change are in bp
5
456
460
3,721
386
346
4,914
221
80
1,088
3,121
4,290
29
374
4,914
48.1
11.1
6.9
0.3
1.1
4.3
4.3
7.1
6.3
1.2
3.5
2.0
51.9
3,488
11,428
2Q
5
482
487
3,907
385
320
5,100
204
113
1,154
3,273
4,540
29
327
5,100
48.3
11.5
7.1
0.3
1.1
4.2
4.3
6.7
6.0
1.2
3.9
2.0
51.7
3,600
11,515
3Q
5
512
517
4,141
397
294
5,349
210
121
1,196
3,471
4,788
29
322
5,349
47.5
11.5
7.1
0.3
1.1
3.8
4.4
6.1
5.8
1.1
3.9
2.1
52.5
3,659
11,633
4Q
5
615
620
4,508
452
325
5,905
275
88
1,516
3,655
5,260
31
339
5,905
47.3
11.1
7.1
0.4
1.1
3.5
4.4
5.2
6.6
1.1
4.4
2.4
52.7
4,014
11,766
1Q
5
645
650
4,842
469
332
6,293
244
143
1,724
3,820
5,687
32
331
6,293
49.0
11.4
7.5
0.3
1.1
3.5
4.4
6.3
7.0
1.1
4.4
2.0
51.0
4,101
11,952
2Q
5
678
683
5,069
523
325
6,600
257
78
1,713
4,185
5,976
32
335
6,600
48.8
11.0
7.6
0.3
1.1
3.5
4.3
6.5
6.8
1.0
4.6
2.1
51.2
4,227
11,666
FY16
3Q
5
715
720
5,240
600
319
6,879
268
58
1,823
4,364
6,245
32
333
6,879
49.2
11.4
8.0
0.3
1.2
3.4
4.5
6.2
6.5
1.0
4.5
2.2
50.8
4,281
11,843
4Q
5
722
727
5,464
530
367
7,088
301
89
1,639
4,646
6,373
33
381
7,088
48.2
10.8
8.0
0.3
1.2
3.2
4.4
5.4
6.9
1.0
4.8
2.3
51.8
4,520
12,000
1Q
5
759
764
5,738
689
361
7,551
284
119
2,063
4,706
6,888
35
344
7,551
49.5
11.1
8.6
0.3
1.2
3.3
4.5
5.4
7.1
1.0
4.7
2.4
50.5
4,541
12,013
FY17
2Q
5
800
806
5,917
770
395
7,888
286
179
2,067
4,944
7,189
35
377
7,888
51.1
11.4
9.0
0.3
1.2
3.4
4.3
6.4
6.8
1.0
4.9
2.4
48.9
4,548
12,016
Variation (%)
QoQ
YoY
0
5
5
5
30
-2
7
-5
34
26
1
8
4
-10
7
128
28
60
-1
2
10
10
0
28
5
-17
4
-128
21
13
1
18
18
19
47
9
20
17
-17
20
23
21
10
4
20
50
-29
106
0
3
-25
10
-85
10
-8
31
38
-50
440
61
Source: Company, MOSL
25 October 2016
11

HDFC Bank
Exhibit 21:
Financials:
Valuation metrics
Rating
66
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
IDFC Bk
FB
DCBB
JKBK
SIB
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
OBC
INBK
ANDB
Public Aggregate
Banks Aggregate
HDFC*
LICHF
IHFL
GRHF
REPCO
DEWH
Housing Finance
RECL
POWF
Infra Finance
SHTF
MMFS
BAF
MUTH
SKSM
Asset Finance
NBFC Aggregate
Financials
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
UR
Buy
CMP
(INR)
262
1,228
538
761
1,155
1,136
50
61
100
68
21
226
124
107
152
252
131
112
148
58
Mcap
(USDb)
23.1
47.1
19.4
21.1
7.4
10.2
2.6
1.6
0.4
0.5
0.4
133.9
26.5
3.7
1.4
5.3
2.1
1.4
0.5
1.1
1.8
43.8
177.6
31.9
3.8
4.6
1.6
0.8
1.0
43.6
3.0
4.1
7.1
4.0
2.7
7.1
1.7
1.5
16.9
67.7
245.3
EPS (INR)
FY17
18.1
58.4
35.0
26.1
78.9
50.5
3.0
3.7
7.4
17.6
3.1
P/E (x)
BV (INR)
P/BV (x)
RoA (%)
RoE (%)
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
1,332
503
714
291
835
218
199
207
1,168
317
8,710
275
764
FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18
20.8 10.7 8.0
145
159
1.25 1.05 1.19 1.22 11.1 11.8
70.3 21.0 17.5 332
386
3.70 3.18 1.89 1.86 18.9 19.6
41.0 15.4 13.1 251
285
2.14 1.89 1.45 1.43 14.7 15.2
33.7 29.1 22.6 207
239
3.68 3.18 1.50 1.70 14.2 15.4
97.3 14.6 11.9 391
468
2.96 2.47 1.81 1.83 22.0 22.7
63.8 22.5 17.8 334
389
3.40 2.92 1.92 1.96 16.2 17.6
4.1 16.9 12.2
42
46
1.19 1.10 1.09 1.12 7.2
9.4
4.5 16.3 13.6
50
53
1.22 1.14 0.64 0.65 7.7
8.7
8.6 13.5 11.6
69
78
1.45 1.29 0.98 0.93 11.3 11.7
21.2 3.8
3.2
146
162
0.46 0.42 0.99 1.05 12.7 13.7
3.7
7.0
5.8
30
33
0.72 0.66 0.61 0.64 10.7 11.7
19.1 16.0
2.59 2.29
19.3 24.3 11.7 9.3
240
259
1.00 0.92 0.49 0.54 8.3
9.7
15.7 19.9 7.9
6.2
200
220
0.62 0.56 0.44 0.50 8.2
9.5
9.3
23.5 11.6 4.6
337
356
0.32 0.30 0.12 0.27 2.8
6.8
14.7 18.7 10.4 8.2
159
173
0.96 0.88 0.48 0.54 9.6 11.2
33.1 42.4 7.6
5.9
505
537
0.50 0.47 0.31 0.36 6.7
8.1
26.8 36.7 4.9
3.6
318
351
0.41 0.37 0.43 0.53 8.7 11.0
22.1 27.9 5.1
4.0
473
494
0.24 0.23 0.28 0.32 4.8
5.8
22.2 29.1 6.7
5.1
298
320
0.50 0.46 0.49 0.56 7.7
9.4
2.9
8.2 19.8 7.1
129
136
0.45 0.43 0.15 0.39 2.3
6.2
11.5 8.5
0.75 0.70
16.5 13.2
1.61 1.47
40.1 46.3 23.0 18.4 194
221
4.39 3.53 1.89 2.10 20.0 22.1
39.5 47.3 12.7 10.6 213
251
2.36 2.00 1.49 1.51 20.1 20.9
68.2 84.0 10.5 8.5
280
315
2.55 2.27 3.84 3.78 23.4 28.2
8.3
10.7 35.0 27.3
28
35
10.25 8.24 2.33 2.34 32.4 33.5
30.3 39.0 27.6 21.4 179
214
4.65 3.90 2.14 2.17 18.2 19.8
29.4 36.2 7.4
6.0
194
221
1.12 0.99 1.18 1.20 16.1 17.4
20.6 17.4
4.16 3.67
59.2 68.6 3.4
2.9
336
389
0.59 0.51 2.63 2.55 18.9 18.9
46.8 49.1 4.4
4.2
72
107
2.89 1.94 2.69 2.35 85.1 55.0
3.9 3.5
1.11 0.90
75.5 94.2 15.5 12.4 507
581
2.30 2.01 2.17 2.27 15.7 17.1
15.5 18.8 20.4 16.9 119
133
2.66 2.39 2.14 2.26 13.7 15.0
308.1 380.8 28.3 22.9 1,631 1,956 5.34 4.45 3.14 3.02 20.6 21.2
24.9 32.0 11.0 8.6
157
177
1.75 1.55 3.29 3.47 16.7 19.2
46.2 47.9 16.5 16.0 153
201
4.99 3.80 6.28 4.69 35.5 27.1
19.2 15.7
3.08 2.78
14.0 12.1
3.02 2.62
15.7 12.9
1.85 1.67
*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
25 October 2016
12

HDFC Bank
Financials and Valuation
Income Statement
Y/E March
Interest Income
Interest Expense
Net Interest Income
Change (%)
Non Interest Income
Net Income
Change (%)
Operating Expenses
Pre Provision Profits
Change (%)
Provisions (excl tax)
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Equity Dividend (Incl tax)
Core PPP*
Change (%)
*Core PPP is (NII+Fee income-Opex)
2012
278,742
149,896
128,846
17.2
57,836
186,682
17.1
92,776
93,906
15.1
18,774
75,132
23,461
31.2
51,671
31.6
11,749
79,428
16.5
2013
350,649
192,538
158,111
22.7
68,526
226,637
21.4
112,361
114,276
21.7
16,770
97,506
30,249
31.0
67,257
30.2
15,360
97,607
22.9
2014
411,355
226,529
184,826
16.9
79,196
264,023
16.5
120,422
143,601
25.7
15,880
127,721
42,937
33.6
84,784
26.1
19,275
122,227
25.2
2015
484,699
260,742
223,957
21.2
89,964
313,920
18.9
139,875
174,045
21.2
20,758
153,287
51,128
33.4
102,159
20.5
24,142
150,348
23.0
2016
602,214
326,299
275,915
23.2
107,517
383,432
22.1
169,797
213,635
22.7
27,256
186,379
63,417
34.0
122,962
20.4
28,790
184,470
22.7
2017E
688,060
365,489
322,571
16.9
123,489
446,059
16.3
195,824
250,235
17.1
27,464
222,772
74,963
33.7
147,809
20.2
34,440
216,100
17.1
(INR Million)
2018E
798,479
414,750
383,729
19.0
145,764
529,493
18.7
228,456
301,037
20.3
33,836
267,201
89,512
33.5
177,689
20.2
41,401
260,748
20.7
2019E
973,993
511,870
462,123
20.4
172,281
634,404
19.8
266,543
367,861
22.2
49,366
318,495
105,103
33.0
213,391
20.1
49,720
320,042
22.7
Balance Sheet
Y/E March
Equity Share Capital
Reserves & Surplus
Net Worth
Deposits
Change (%)
of which CASA Dep
Change (%)
Borrowings
Other Liabilities & Prov.
Total Liabilities
Current Assets
Investments
Change (%)
Loans
Change (%)
Fixed Assets
Other Assets
Total Assets
2012
4,693
294,553
299,247
2,467,064
18.3
1,194,059
8.6
238,465
374,319
3,379,095
209,377
974,829
37.4
1,954,200
22.2
23,472
217,216
3,379,095
2013
4,759
357,383
362,141
2,962,470
20.1
1,405,215
17.7
330,066
348,642
4,003,319
272,802
1,116,136
14.5
2,397,206
22.7
27,031
190,144
4,003,319
2014
4,798
429,988
434,786
3,673,375
24.0
1,646,214
17.2
394,390
413,444
4,915,995
395,836
1,209,511
8.4
3,030,003
26.4
29,399
251,246
4,915,995
2015
5,013
615,081
620,094
4,507,956
22.7
1,984,921
20.6
452,136
324,845
5,905,031
363,315
1,516,418
25.4
3,654,950
20.6
31,217
339,131
5,905,031
2016
5,056
721,721
726,778
5,464,242
21.2
2,363,108
19.1
530,185
367,251
7,088,456
389,188
1,638,858
8.1
4,645,940
27.1
33,432
381,038
7,088,456
2017E
5,056
835,091
840,147
6,338,521
16.0
2,865,307
21.3
721,825
405,320
8,305,813
464,351
1,884,686
15.0
5,482,209
18.0
36,373
438,194
8,305,813
(INR Million)
2018E
5,056
971,378
976,434
7,732,995
22.0
3,474,453
21.3
803,497
467,439
9,980,366
524,903
2,223,930
18.0
6,688,295
22.0
39,315
503,923
9,980,366
2019E
5,056
1,135,049
1,140,106
9,588,914
24.0
4,213,367
21.3
896,554
539,749
12,165,322
623,831
2,624,237
18.0
8,293,485
24.0
44,256
579,512
12,165,322
Asset Quality
Y/E March
GNPA (INR m)
NNPA (INR m)
GNPA Ratio
NNPA Ratio
PCR (Excl Tech. write off)
E: MOSL Estimates
2012
19,994
3,523
1.0
0.2
82.4
2013
23,346
4,690
1.0
0.2
79.9
2014
29,893
8,200
1.0
0.3
72.6
2015
34,384
8,963
0.9
0.2
73.9
2016E
43,928
13,204
0.9
0.3
69.9
2017E
58,924
21,081
1.1
0.4
64.2
2018E
80,036
27,682
1.2
0.4
65.4
(%)
2016E
123,771
48,471
1.5
0.6
60.8
25 October 2016
13

HDFC Bank
Financials and Valuation
Ratios
Y/E March
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 1
79.2
48.4
39.5
16.5
11.6
80.9
47.4
37.7
16.8
11.1
82.5
44.8
32.9
16.1
11.8
81.1
44.0
33.6
16.8
13.7
85.0
43.2
30.0
15.5
13.2
86.5
45.2
29.7
15.0
12.9
86.5
44.9
28.8
14.1
12.3
86.5
43.9
27.4
13.1
11.6
49.2
36.6
66.5
0.8
49.9
35.3
72.4
1.0
45.8
34.7
87.9
1.2
47.0
34.0
102.7
1.4
46.7
33.6
111.3
1.5
46.4
33.2
119.5
1.6
45.7
33.6
133.2
1.8
44.5
34.0
155.1
2.0
18.7
1.7
53.8
29.3
31.0
20.3
1.8
54.9
27.3
30.2
21.3
1.9
55.1
27.2
30.0
19.4
1.9
53.8
24.4
28.7
18.3
1.9
54.2
23.6
28.0
18.9
1.9
53.1
22.9
27.7
19.6
1.9
51.9
22.8
27.5
20.2
1.9
52.6
22.5
27.2
10.4
11.9
7.7
6.1
5.6
4.4
4.8
10.6
12.3
7.5
6.4
6.0
4.2
4.8
10.3
11.7
7.8
6.2
5.7
4.1
4.6
10.1
11.1
7.2
5.8
5.7
4.3
4.6
10.4
10.8
9.0
6.0
5.9
4.4
4.7
9.9
10.4
8.5
5.6
5.3
4.3
4.7
9.6
10.1
8.1
5.3
5.0
4.3
4.6
9.7
10.1
8.1
5.4
5.1
4.3
4.6
2012
2013
2014
2015
2016
2017E
2018E
2019E
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
4.3
5.5
6.9
22.0
30.4
28.3
28.4
35.3
25.0
126
151
179
127
16.8
152
19.4
181
19.2
247
36.5
5.1
245
5.1
40.8
15.3
30.7
8.0
0.6
287
16.2
4.4
284
4.4
48.6
19.3
25.7
9.5
0.8
332
15.6
3.8
326
3.8
58.5
20.2
21.4
11.7
0.9
386
16.2
3.2
378
3.3
70.3
20.2
17.8
14.1
1.1
451
16.8
2.8
437
2.9
84.4
20.1
14.8
16.9
1.4
25 October 2016
14

HDFC Bank
Corporate profile
Company description
HDFC Bank 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 (21.6% 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 September 30,
2015, the bank had a network of 4,227 branches and
11,666 ATMs spread across the country.
Exhibit 2: Shareholding pattern (%)
Promoter
DII
FII
Others
Sep-16
21.3
11.8
50.6
16.3
Jun-16
21.4
11.3
50.9
16.4
Sep-15
21.6
11.0
51.2
16.3
Exhibit 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 3: Top holders
Holder Name
Europacific Growth Fund
LIC of India
ICICI Prudential Value Discovery Fund
ICICI Prudential Life Insurance Company Ltd
Capital World Growth and Income Fund
% Holding
3.9
2.0
1.6
1.5
1.4
Source: Capitaline
Note: FII Includes depository receipts
Source: Capitaline
Exhibit 4: Top management
Name
Shyamala Gopinath
Aditya Puri
Paresh Sukthankar
Kaizad Bharucha
Sanjay Dongre
Designation
Chairperson
Managing Director
Deputy Managing Director
Executive Director
Company Secretary
Exhibit 5: Directors
Name
A N Roy
Keki Mistry
Partho S Datta
Name
Bobby Parikh
Malay Patel
Renu Karnad
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Delloite Haskins & Sells
Type
Tax
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
58.5
70.3
Consensus
forecast
58.5
71.5
Variation (%)
0.0
-1.7
Source: Bloomberg
Source: Capitaline
25 October 2016
15

Disclosures
HDFC Bank
This document has been prepared by Motilal Oswal Securities Limited (hereinafter referred to as Most) to provide information about the company (ies) and/sector(s), if any, covered in the report and may be distributed by it and/or its
affiliated company(ies). This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or
inducement to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been furnished to
you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment
objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek
professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for
future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships with a some
companies covered by our Research Department. Our research professionals may provide input into our investment banking and other business selection processes. Investors should assume that MOSt and/or its affiliates are
seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may educate investors
on investments in such business . The research professionals responsible for the preparation of this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and
interpreting information. Our research professionals are paid on twin parameters of performance & profitability of MOSt.
MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt
generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates
may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment
decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing among other things, may give rise to real or potential conflicts of interest.
MOSt and its affiliated company(ies), their directors and employees and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies
mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an
advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing
whatsoever on the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the affiliates of MOSt even though there might exist an inherent
conflict of interest in some of the stocks mentioned in the research report
Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not
match with a report on a company's fundamental analysis. In addition MOST has different business segments / Divisions with independent research separated by Chinese walls catering to different set of customers having various
objectives, risk profiles, investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from,
any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free
and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other
sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the data, information and/or opinions provided by that third party either publicly or through a
subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete statement or summary of the securities, markets or developments referred to in the
document. While we would endeavor to update the information herein on reasonable basis, MOSt and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that
may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the
implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for
any necessary explanation of its contents.
Most and it’s associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received any compensation
for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.
Most and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.
Subject Company may have been a client of Most or its associates during twelve months preceding the date of distribution of the research report
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities mentioned in this
report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412
Pending Regulatory inspections against Motilal Oswal Securities Limited:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold inquiry and
adjudge violation of SEBI Regulations; MOSL replied to the Show Cause Notice whereby SEBI granted us an opportunity of Inspection of Documents. Since all the documents requested by us were not covered we have requested to
SEBI vide our letter dated June 23, 2015 to provide pending list of documents for inspection.
List of associate companies of Motilal Oswal Securities Limited -Click
here to access detailed report
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive
compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
HDFC BANK
Disclosure of Interest Statement
Analyst ownership of the stock
No
Served as an officer, director or employee -
No
A graph of daily closing prices of securities is available at www.nseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which
would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures
Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has
an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Kong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to
SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in
Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a
registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the
absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This
document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be
engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by
the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal
Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore,
may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the
Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
Contact : (+65) 68189232
Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
Kadambari Balachandran
kadambari.balachandran@motilaloswal.com
(+65) 68189233 / 65249115
Motilal Oswal Securities Ltd
25 October 2016
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
16