Detailed Report | Sector: Financials
12 Annual Global Investor Conference
BSE Sensex
28,797
S&P CNX
8,867
th
HDFC Bank
TP: INR1,450 (+12%)
Mr Aditya Puri
MD and CEO
HDFC Bank
CMP: INR1,291
Buy
CEO TRACK
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
12M Avg Val (INR M)
Free float (%)
HDFCB IN
2528.2
1,305/929
1/9/15
3,264
48.9
1,637
78.6
2019E
484.4
375.0
213.8
4.6
84.6
20.4
450.9
438.7
20.2
1.9
23.4
15.3
2.9
2.9
1.3
It’s all about being digital
Key takeaways from CEO Track
Financial Snapshot (INR Billion)
2017E 2018E
Y/E Mar
NII
335.5 399.2
OP
256.8 306.3
NP
147.8 177.6
NIM (%)
4.8
4.7
EPS (INR)
58.4
70.2
EPS Gr. (%)
20.2
20.2
BV/Sh. (INR) 332.2 386.1
ABV/Sh. (INR) 326.5 379.0
RoE (%)
18.9
19.6
RoA (%)
1.9
1.9
Payout (%)
23.4
23.4
Valuations
P/E(X)
22.1
18.4
P/BV (X)
3.9
3.3
P/ABV (X)
4.0
3.4
Div. Yield (%)
0.9
1.1
Relative to Index
Significant investment in digital initiatives has begun paying off: (a) ~20% of
incremental unsecured personal loans sourced through 10-second personal loan
product, (b) 8-10% of auto loans sourced through digital channel, (c) volumes on
SmartBuy, HDFCB’s online market place almost 1/10th of Amazon’s volumes.
HDFCB’s digital journey will continue through collaborations/partnerships. It is
committed to platform-agnostic services. Lot of technology initiatives are in store –
expect rollout by March 2017 (robots in branches, artificial intelligence).
Significant investments in branches and technology would provide operating leverage
and efficiency in ensuing quarters. Expect cost-to-income ratio to decline, led by
higher business volumes.
HDFCB remains a picture-perfect story, with (a) continued market share gain (12.5%
incremental share (9.2% for FY15)), (b) adequate capitalization (CET1 of 13.3%, best in
class), (c) CASA ratio of 40%+, (d) best in class profitability, with 1.9% RoA and 18.3%
RoE. Subsidiaries have become sizeable – based on multiple of 15x for securities
business and 3x BV for NBFC business, per share value for HDFCB works out to INR58
(post HoldCo).
Digital journey – customer focus and ease of business key effort areas
HDFCB’s digital strategy is centered around (a) increasing efficiency, (b) accelerating
geographic expansion, (c) raising customer convenience and ease, and (d)
competing against disruptive technology. It is already seeing strong success in 10-
second personal loans (20% of incremental sourcing through this channel), pre-
approved auto loans (8-10% of disbursements), and SmartBuy (10% of Amazon’s
volumes). It plans to use artificial intelligence for routine work and most initiatives
are likely to be launched by December 2016. With these initiatives gaining traction
and incremental business coming from these channels, the management is
confident of reducing the cost-to-income ratio.
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com)
Krishnan ASV
(A.Krishnan@MotilalOswal.com);+91 22 6129 1571 /
Rahul Gupta
(rahul.pgupta@MotilalOswal.com); +91 22 6129
1544
September 2016
advised to refer through important disclosures made at the last page of the Research Report.
1
Investors are
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

HDFC Bank
12 Annual Global Investor Conference
th
Payments business – significant market share gains
HDFC Bank has gained
significant market share
across segments
In payments solutions, HDFCB has presence across segments – B2B, B2C, P2P, etc.
UPI is a strong enabler for financial inclusion and cashless economy. The bank has
gained market share in RTGS (19%), NEFT (13%), mobile banking (23%), credit card
transactions (31%), and POS transactions (8%). With digital initiatives, the
management expects its leadership to strengthen.
Working capital demand improving; rural/semi-urban retail demand strong
HDFCB is seeing improving demand for working capital. However, capex demand is
still a year away. For capex, corporates await strong signals like acceleration in GDP
to 8%+, revival in global growth, etc. HDFCB’s strong expansion in rural and semi-
urban areas is leading to strong traction in retail and SME business. While overall
demand is slow in such locations, HDFCB’s focus on top 25% population in such
locations for loan products is leading to strong growth.
Operating parameters best-in-class; adequately capitalized
Mr Puri remains confident about HDFCB’s ability to grow at least 1.3x the system
and gain market share. With impeccable asset quality, strong control over core
income parameters and expected operating leverage, profit growth should remain
healthy. Strong expansion in rural and semi-urban locations would drive healthy
growth in the years to come.
HDFC Bank’s subsidiaries
have become sizeable now
and the management
remains upbeat on the
business
Subsidiaries gaining strength – strong growth ahead
HDFCB’s subsidiaries have become sizeable – the NBFC’s AUM is INR260b
(comparable to CIFC) and HDFC Securities’ topline is INR4b. HDB Financial Services
has expanded rapidly and makes 2.4% RoA and 16% RoE. The management remains
upbeat on the business. HDFC Securities also makes healthy RoE of 21%+, with a PAT
margin of 33%. Value accretion in these businesses is significant. Our back-of-the-
envelope calculation suggests total value of INR182b for both businesses. Post
HoldCo discount, the value per share for HDFCB works out to be INR58.
Best-placed private-sector bank
ROE is expected to be ~19-
20%. We value HDFCB at
INR1,450 per share,
implying 3.5x Sep-18 BV
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 the moderate growth cycle (branches at 4,541 v/s
1,412 in FY09) and significant digitalization initiatives, the bank is well placed to
benefit from the expected pick-up in the economic growth cycle. HDFCB is the
second largest bank in the country after SBI, now with a market share of 5.7%. RoE is
expected to be 19-20% in FY18/19. Comfort on earnings remains high. We maintain
our RI-model-based target price of INR1,450 (3.5x September 2018E BV).
September 2016
2

HDFC Bank
12 Annual Global Investor Conference
Exhibit 1:
Market share across products
FY12
FY16
26.9
14.3 13.0
17.1 19.1
13.5 14.7
30.6
22.6
th
8.6
8.3
2.0
NEFT - Values
RTGS - Values RTGS - Volumes
Debit Cards
(Values)
Credit Card Mobile Banking
Transactions -
Values
Source: RBI, Company, MOSL
Share of internet / mobile
based transactions has
increased from 55% in FY14
to 71% in FY16.
Exhibit 2:
Leveraging technology should lead to cost efficiency, as digital transactions cost
~1/10th of branch-based transactions
Branches
3
14
40
51
43
FY01
23
FY06
16
10
ATM
29
12
40
19
FY09
55
5
25
15
FY14
63
4
21
12
FY15
71
3
15
11
FY16
Phone Banking
Internet & Mobile
Source: Company, MOSL
Exhibit 3:
Key digital offerings of HDFC Bank
Chillr
Smartbuy
PayZapp
Mobile Banking App
SmartBuy is a marketplace / platform,
HDFC Bank MobileBanking App for
An app that lets you send money that has tied up with various
A complete payment solution,
Android helps you check your
immediately to anyone in your
merchants, for display of offers
giving you the power to pay in just
account balance, transfer funds,
phone book, 24x7
extended by merchants to HDFC
One Click.
pay your bills, etc.
Bank's debit / credit card customers
You can shop on your mobile at
partner apps, buy movie tickets,
HDFC Bank facilitates the payment by
Can also send money without
music and groceries, compare and
its customers by providing the
You can access 75+transactions
sharing mobile numbers with Chillr
book flight tickets and hotels,
Payment Gateway Services and does
anytime, anywhere, using your
App users in your vicinity, using
shop online, send money to
not earn any fee by hosting this
fingertips
'Near Me' option
anyone in your contact list, pay
website
bills and recharge your mobile,
DTH and data card.
Recharge your mobile, DTH and
data cards
Immediate transfer money
between bank accounts
Source: MOSL, Company
September 2016
3

HDFC Bank
12 Annual Global Investor Conference
th
Exhibit 4:
Loans grew at CAGR of ~30% over FY06-16…
Market Share in Loans (%)
3.9
3.6 3.7
4.1
4.5
5.7
4.9
Exhibit 5:
…while deposits grew at CAGR of ~26%
Market Share in deposits (%)
3.8 4.0
3.5 3.7
3.5
4.3
4.8
5.3
3.3
2.6
2.3 2.4
2.6 2.5
3.0
Source: RBI, MOSL, Company
Source: RBI, MOSL, Company
Exhibit 6:
CA market share
CA mkt share (%)
Exhibit 7:
SA deposit share
SA mkt share (%)
6.3 6.0
5.7 6.2
6.7 6.9 7.0
7.5
8.1
8.9
9.8
3.2
3.6
4.1
4.3
4.9
4.6 4.8
5.2
5.5
2.8 2.9
Source: RBI, MOSL, Company
Source: RBI, MOSL, Company
Share in profits continue to
rise given PSU Banks are
marred by asset quality
concerns.
Exhibit 8:
Profit share tripled at the expense of PSU banks (PAT MS, %)
PAT Market Share (%)
Private Banks PAT Market Share (%)
36.0
17.8
3.5
18.7
3.7
18.8
3.7
22.3
4.3
21.7
5.2
21.7
5.6
22.5
6.3
23.2
7.4
24.9
10.5
25.6
12.4
28.9
Source: RBI, Company, MOSL
September 2016
4

HDFC Bank
12 Annual Global Investor Conference
Exhibit 9:
Branch additions at 3x industry average (branch
MS, %)
3.2
Exhibit 10:
Customer base has increased sharply (~4m), led
by network expansion (m)
~2m customers added
from CBOP
th
1.6
0.7
0.9
0.9
1.9
2.0
2.4
2.7
2.8
Source: RBI, Company, MOSL
Source: Company, MOSL
Exhibit 11:
Incremental branches opened with focus on
semi-urban and rural regions (branch mix, %)
Metro
9
31
28
32
FY11
9
36
27
28
FY12
Urban
16
36
23
24
FY13
Semi-Urban
22
34
21
23
FY14
23
32
21
24
FY15
Rural
23
32
20
25
FY16
Exhibit 12:
The bank is expected to add 300-400 branches
each year for the next three years
Branches
Source: Company, MOSL
Source: Company, MOSL
Exhibit 13:
Share of retail deposits increasing, pointing to
power of strong liability franchise (deposit mix, %)
Saving Dep.
Retail term dep.
11
45
20
24
10
38
22
30
11
37
22
30
9
42
18
30
7
45
18
30
Current Dep.
Corp. term dep.
5
5
50
17
28
51
16
28
4
53
16
27
Exhibit 14:
The bank has a diversified loan book
Kissan gold Others,
4.4
cards, 9.6
Auto Loans,
Gold loans,
25.1
2.4
Personal
Loans, 16.7
Home
loans, 15.6
Loan
Business
against
Bkg, 13.9
securities,
0.6
Com.
Credit
Two
Vehle &
Cards, 9.8
wheeler,
const
2.5
equip, 11.8
Source: MOSL, Company
Source: MOSL, Company
September 2016
5

HDFC Bank
12 Annual Global Investor Conference
Exhibit 16:
Sustaining high internal capital generation rates
remains key
5:25
SDR
th
Exhibit 15:
Best-in-class asset quality
17.7 17.4
14.8
4.8 6.1
NNPA (%)
OSRL (%)
22.0
12.7 12.1 12.0 11.6
RoE (%)
RoA (%), RS
2.0
1.8
1.6
1.4
1.2
1.0
9.3
4.2 3.1 3.9
6.6
4.9 2.8
2.6 1.6 4.5
9.1 8.1
7.8 5.7
6.7
4.4 6.2 4.1 3.4 2.1 0.8 0.4
1.1
20.0
18.0
16.0
14.0
12.0
Capital Raised
Source: Company, MOSL
Source: Company, MOSL
Exhibit 17:
AUM has become substantial for HDB now
AUM (INR Bn)
Disbursements (INR Bn)
259
83 59
40 34
13 12
136
193
90
114
148
Exhibit 18:
Asset quality worsened but still at low levels
Disbursements Growth (YoY, %)
178.2
129.7
76.2
52.0
26.1
30.5
6
5
Source: Company, MOSL
Source: Company, MOSL
Exhibit 19:
Profitability continues to show uptrend
ROA (%)
12.5
1.6
ROE (%), RHS
16.7
1.7
3.8
1.9
6.9
1.9
2.4
2.1
14.7
16.0
Exhibit 20:
HDFC Securities profitability still at high levels
PAT Margin (%)
ROE (%)
39.6
25.8
28.8
29.8
32.6
19.8
19.3
21.6
33.2
19.6
Source: Company, MOSL
Source: Company, MOSL
September 2016
6

HDFC Bank
12 Annual Global Investor Conference
th
Best getting better
Market share gains to accelerate; 20%+ earnings CAGR
Market share in loans has
increased by 3% points in
the last 5 years to 5.7%;
second only to SBIN.
Finding opportunity in adversity – continues to gain market share
Historically, HDFCB has capitalized periods of adversity or weak competition to gain
market share in each product category. It is the leader in most retail products, with
a market share of at least 10%. In two decades since its inception, HDFCB has
become India’s second largest bank (largest private bank). Its loan market share as
of FY16 stands at 5.7%. Retail loan growth is seeing strong revival, with rising
contribution from high RoE retail products like unsecured personal loans, LAS and
credit cards. Despite moderate growth in underlying assets like auto, CV and CE
loans, HDFCB is seeing strong loan growth, indicating market share gain. Given that
HDFCB is likely to grow at least 1.3x the industry growth, we expect market share
gains to continue and reach 7% by FY19.
Operating leverage to drive profitability
Led by strong loan growth, revenue growth remains healthy at 20%+ over the last
seven quarters, giving HDFCB avenues to expand aggressively (branches up 11% YoY,
headcount up 12% YoY) and invest in digitalization without much impact on cost
ratios (C/I ratio remains at 45-47%). We expect core revenue to grow at 20%+
hereon. Cost-to-income ratio should continue to decline (to 43% by FY19), as the
share of incremental sourcing from digital channel increases and overhead cost
declines with the use of technology.
HDFCB boasts of one of the
best operating parameters
in the business.
Best operating parameters in the country
HDFCB enjoys one of the best operating parameters in the country, with (1) CASA
ratio of ~40%, (2) growth outlook of at least 1.3x industry growth, (3) best-in-class
asset quality, (d) CET ratio of ~13.5%, and (b) 1.8%+ RoA and 19-20% RoE. Despite
pricing pressure, NIMs are expected to remain at the current levels, with (a) pick-up
in CASA growth, (b) benefit of falling rate cycle due to high share of fixed rate retail
loans (~70% of book), and (c) rise in contribution of high-yielding retail loans. HDFCB
carries floating provisions of INR13b+, created to smoothen earnings growth, led by
lower-than-factored credit cost on retail loans.
Earnings CAGR of 20%+; re-iterate Buy
We expect earnings CAGR of 20% (best amongst the large private banks). Core
income growth would pick up, led by healthy loan growth, superior NIMs, gradual
improvement in fee income, and operating efficiencies driven by digital initiatives.
We maintain Buy, with a target price of INR1,450 (3.8x FY18E BV). 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%. The
stock trades at 3.3x FY18E BV and 18.4x FY18E EPS.
September 2016
7

HDFC Bank
12 Annual Global Investor Conference
Exhibit 21:
One-year forward P/BV
5.5
4.5
3.5
2.5
1.5
3.4
3.4
1.9
3.6
PB (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
5.0
th
Exhibit 22:
One-year forward P/E
42
34
26
18
10
20.1
20.9
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
35.1
20.2
13.9
Source: Company, MOSL
Source: Company, MOSL
Exhibit 23:
DuPont: Return ratios to improve, driven by strong core operating performance (%)
Y/E March
Net Interest Income
Core Fee Income
Fee to core Income (%)
Core Income
Operating Expenses
Cost to Core Income (%)
Employee cost
Others
Core operating Profits
Trading and others
Operating Profits
Provisions
NPA
Others
PBT
Tax
Tax Rate (%)
RoA
Leverage (x)
RoE
FY10
2.66
1.61
35.0
4.27
1.69
39.5
0.87
0.82
2.58
0.33
2.91
0.46
0.30
0.17
2.45
0.84
34.2
1.61
12.6
20.3
FY11
2.61
1.40
35.8
4.02
1.43
35.5
0.76
0.67
2.59
-0.10
2.50
0.21
0.08
0.13
2.29
0.77
33.4
1.52
13.9
21.1
FY12
2.44
1.24
33.1
3.67
1.41
38.3
0.72
0.69
2.27
0.06
2.32
0.14
0.02
0.12
2.19
0.71
32.6
1.47
15.7
23.1
FY13
2.57
1.28
31.7
3.84
1.55
40.2
0.76
0.79
2.30
0.18
2.48
0.25
0.17
0.08
2.23
0.72
32.5
1.51
16.5
24.8
FY14
2.61
1.49
35.0
4.11
1.68
41.0
0.75
0.93
2.42
0.16
2.58
0.35
0.13
0.22
2.24
0.68
30.5
1.55
16.1
25.0
FY15
2.85
1.55
34.4
4.40
1.86
42.4
0.80
1.06
2.53
0.12
2.65
0.28
0.11
0.17
2.37
0.74
31.1
1.64
13.0
21.3
FY16
3.03
1.63
33.7
4.66
1.97
42.4
0.86
1.11
2.68
0.17
2.85
0.36
0.33
0.03
2.50
0.81
32.6
1.68
11.8
19.9
FY17E
3.12
1.79
34.7
4.91
2.06
41.9
0.95
1.11
2.85
0.25
3.10
0.43
0.42
0.01
2.67
0.87
32.5
1.80
12.2
22.0
FY18E
3.21
1.88
35.5
5.09
2.08
40.8
0.96
1.12
3.01
0.20
3.21
0.46
0.44
0.02
2.76
0.90
32.5
1.86
12.6
23.5
FY19E
3.33
1.88
35.0
5.21
2.08
39.9
0.96
1.12
3.13
0.16
3.29
0.55
0.48
0.06
2.75
0.89
32.5
1.85
13.0
24.1
Source: Company, MOSL
September 2016
8

HDFC Bank
12 Annual Global Investor Conference
Exhibit 24:
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
Buy
Buy
Neutral
Buy
CMP
Mcap
EPS (INR)
FY17
17.2
58.4
31.8
26.8
78.8
50.5
3.3
3.9
7.4
17.6
3.1
FY18
19.9
70.2
37.4
34.0
99.2
63.8
4.0
4.7
8.6
21.2
3.7
P/E (x)
FY17
12.5
22.1
19.3
30.6
16.2
24.0
19.6
18.7
16.4
4.4
7.9
21.1
14.7
10.8
-10.8
14.1
25.4
22.4
16.7
24.8
2.9
24.3
12.8
21.6
20.0
34.8
39.1
24.2
31.4
8.2
17.9
13.4
-11.5
12.2
12.3
6.7
7.8
9.2
21.2
16.2
19.6
34.6
40.4
68.2
8.3
30.4
30.5
37.9
50.1
84.0
10.7
39.7
38.2
28.7
14.4
11.7
38.2
28.0
9.8
22.4
59.2
24.0
68.4
13.9
34.6
28.0
48.8
68.6
25.5
84.6
18.1
44.2
33.6
52.5
4.1
5.2
4.7
17.9
25.4
33.3
13.1
16.0
14.3
14.1
17.8
FY18
9.9
18.4
16.4
24.1
12.9
19.0
15.9
15.7
14.1
3.7
6.6
17.7
10.9
11.3
5.7
8.6
8.9
3.8
5.4
7.3
7.6
10.5
15.0
22.9
11.6
9.5
29.8
21.4
7.8
18.8
3.5
4.9
4.2
14.5
19.5
26.1
10.9
14.8
11.6
12.1
14.1
336
149
503
118
166
159
157
389
167
570
131
204
180
210
194
214
280
28
180
194
217
254
315
35
215
222
234
193
239
157
497
314
410
300
129
253
204
255
173
524
348
428
324
136
BV (INR)
FY17
144
332
243
207
390
334
43
50
69
146
30
FY18
158
386
274
240
469
389
46
54
78
162
33
P/BV (x)
FY17
1.43
3.89
2.52
3.95
3.27
3.63
1.50
1.46
1.75
0.54
0.81
2.81
1.20
0.75
0.52
1.09
0.63
0.48
0.32
0.77
0.48
0.82
1.71
4.47
2.73
2.84
11.21
4.74
1.55
4.50
0.72
0.84
0.79
2.43
3.00
6.93
2.30
4.95
2.31
2.54
1.87
FY18
1.24
3.34
2.24
3.41
2.72
3.12
1.40
1.37
1.56
0.48
0.74
2.49
1.10
0.71
0.48
1.00
0.59
0.43
0.30
0.71
0.46
0.77
1.57
3.55
2.30
2.53
9.01
3.96
1.35
3.97
0.62
0.75
0.69
2.14
2.70
5.65
2.03
3.71
2.09
2.25
1.71
2.63
2.37
1.96
1.92
3.48
3.66
6.30
2.55
2.12
2.01
2.19
3.38
3.57
4.48
18.9
16.8
14.4
12.3
22.8
18.7
36.7
18.9
16.2
15.6
14.5
23.9
19.9
28.6
1.85
1.52
3.74
2.33
2.15
1.25
1.83
1.56
3.78
2.34
2.20
1.34
19.5
20.5
25.6
32.4
18.3
16.7
19.0
21.4
28.2
33.5
20.1
18.4
0.47
0.31
-0.16
0.47
0.24
0.37
0.23
0.56
0.15
0.54
0.34
0.29
0.60
0.30
0.58
0.30
0.64
0.39
7.9
5.7
-4.6
9.3
5.2
7.4
4.2
8.5
2.3
9.5
6.5
8.7
12.1
6.8
11.8
5.8
10.1
6.2
RoA (%)
FY17
1.13
1.90
1.32
1.61
1.80
1.92
1.19
0.67
0.98
0.99
0.61
FY18
1.17
1.89
1.31
1.82
1.84
1.96
1.08
0.67
0.93
1.05
0.64
RoE (%)
FY17
10.6
18.9
13.8
14.2
22.0
16.2
7.9
8.0
11.3
12.7
10.7
FY18
11.3
19.6
14.4
15.4
23.1
17.6
9.1
9.0
11.7
13.7
11.7
th
(INR) (USD b)
274
24.2
1,291
49.4
613
22.1
819
22.8
1,277
8.1
1,214
10.9
64
3.3
73
1.9
121
0.5
78
0.6
24
0.5
144.4
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
264
145
123
172
311
149
130
229
62
31.1
4.3
1.7
6.0
2.6
1.6
0.7
1.7
1.9
51.5
195.9
Buy
Buy
Buy
Buy
Buy
Buy
1,411
583
795
318
851
300
33.8
4.5
5.1
1.8
0.8
1.3
47.2
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
242
125
1,223
353
1,152
365
779
3.6
5.0
8.6
4.2
3.0
1.9
2.2
1.5
12.8
68.6
264.5
*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
September 2016
9

HDFC Bank
12 Annual Global Investor Conference
th
Financials and Valuations
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 (%)
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
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
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
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
29,893
8,200
1.0
0.3
72.6
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
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
34,384
8,963
0.9
0.2
73.9
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
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
43,928
13,204
0.9
0.3
69.9
2017E
706,087
370,592
335,495
21.6
126,154
461,649
20.4
204,871
256,777
20.2
33,741
223,036
75,275
33.8
147,761
20.2
34,428
221,528
20.1
2017E
5,056
835,054
840,111
6,557,090
20.0
2,865,307
21.3
653,523
423,426
8,474,150
446,850
1,884,686
15.0
5,668,046
22.0
36,373
438,194
8,474,150
58,924
20,547
1.0
0.4
65.1
2018E
829,643
430,453
399,190
19.0
148,832
548,021
18.7
241,748
306,273
19.3
39,205
267,068
89,468
33.5
177,601
20.2
41,381
264,747
19.5
2018E
5,056
971,274
976,330
8,130,792
24.0
3,474,453
21.3
725,328
488,766
10,321,216
525,671
2,223,930
18.0
7,028,377
24.0
39,315
503,923
10,321,216
83,195
25,555
1.2
0.4
69.3
(INR Million)
2019E
1,017,809
533,387
484,422
21.4
175,826
660,248
20.5
285,263
374,985
22.4
55,914
319,071
105,294
33.0
213,778
20.4
49,810
325,782
23.1
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
(INR Million)
2019E
5,056
1,135,241
1,140,298
10,082,182
24.0
4,213,367
21.3
807,075
564,397
12,593,951
630,758
2,624,237
18.0
8,715,188
24.0
44,256
579,512
12,593,951
Asset Quality
GNPA (INR m)
23,346
NNPA (INR m)
4,690
GNPA Ratio
1.0
NNPA Ratio
0.2
PCR (Excl Tech. write off)
79.9
E: MOSL Estimates; *Core PPP is (NII+Fee income-Opex)
(%)
131,047
44,240
1.5
0.5
66.2
September 2016
10

HDFC Bank
12 Annual Global Investor Conference
th
Financials and Valuations
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
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
86.4
43.7
28.7
14.7
12.7
86.4
42.7
27.4
13.6
11.9
86.4
41.8
26.0
12.7
11.2
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
46.9
32.8
121.7
1.6
46.7
32.8
139.0
1.8
45.7
32.8
163.0
2.1
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
52.5
22.6
27.3
19.6
1.9
51.9
22.5
27.2
20.2
1.9
52.4
22.1
26.6
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
10.1
10.4
9.0
5.6
5.4
4.5
4.8
9.7
10.1
8.4
5.4
5.1
4.4
4.7
9.8
10.1
8.4
5.4
5.2
4.4
4.6
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
5.5
6.9
28.3
28.4
35.3
25.0
151
179
152
19.4
181
19.2
247
36.5
5.2
245
5.3
40.8
15.3
31.7
8.0
0.6
287
16.2
4.5
284
4.6
48.6
19.3
26.5
9.5
0.7
332
15.6
3.9
326
4.0
58.4
20.2
22.1
11.7
0.9
386
16.2
3.3
379
3.4
70.2
20.2
18.4
14.0
1.1
451
16.8
2.9
439
2.9
84.6
20.4
15.3
16.9
1.3
September 2016
11

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