By,Gaurav KanabarHardik Thakker

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WE will Talk AboutWE will Talk About• Introduction• Overview• Net Interest Margin• Capital Adequacy• NPA• CASA• Valuation and View• Investment Rationale• Growth Strategy• Conclusion

IntroductionIntroduction• Incorporated in 1994• Second largest private sector bank• 1765 Branches across the country

OverviewOverview• Retail loans grew strongly 31% YOY in FY10

• Driving overall loan growth 38% YOY in FY10

• Stellar performance on CASA deposits , grew 30

YOY in F10

• Superior NIM at 4.2% in FY10

• Growth of 8% in other income

• Asset quality best in industry

• DEPOSITS

• Operating Profit

• Loans and Deposits

NIM(Net Interest NIM(Net Interest Margin)Margin)

Capital Adequacy Capital Adequacy RatioRatio

NPA(Non Performing NPA(Non Performing Asset)Asset)

CASACASA

Valuation and ViewValuation and View• CASA rate of 52%

• Strong growth outlook of 25-30% in Operating

Profit

• Improving overall operating efficiency

• Lower credit cost led by best in class asset quality

• We except EPS to be Rs. 85 in FY11 and Rs. 111 in FY12.

• In our view, EPS growth will be 30% CAGR over FY10-12

against 25% posted over FY05-10

• WE expect ROE to be 17% by FY11 and 19% by FY12.

• We estimate BV of Rs 543 in FY11 and Rs 631 in FY12.

• While key operating parameters best among peers

valuation factors in all positive , in our view.

• We are bullish on HDFC Bank with price target of Rs. 2350

Investment RationaleInvestment Rationale• Gross bank credit of the banking industry is expected to

grow ~20% in FY11

• HDFC Bank’s credit and deposits grew at Average 34.83%

on last three years and expected to grow at the same pace

• HDFC bank has well diversified portfolio which De-risk the

portfolio

• It has planned to open 150-200 new branches by the end of

Fiscal year FY-10

• Strong Asset policy and Investment portfolio

Comparing with other Comparing with other BanksBanks

Growth StrategyGrowth Strategy

• HDFC Bank’s mission is to be “a world class

Indian Bank”

• Benchmarking itself against international

standards and best practices in terms of product

offerings, technology, service levels, risk

management

Growth strategyGrowth strategy

• Increase its market share in India's expanding banking

and financial SBUs services industry

• Leverage its technology platform and open scalable

systems to deliver more products

• Maintain high standards for asset quality

• Develop innovative products and services

• Focus on healthy earnings growth with low volatility

ConclusionConclusion• Performing good currently And showing better and

improved efficiency

• Need to be very careful with its future strategies as

banking sector is becoming more competitive

• It has to consistently perform well and improve its

overall performance shows in the analysis

• HDFC Bank has grown almost 25% every year and it is

expected to grow the same way as it has grown

• Its balance sheet size may not be like SBI or ICICI Bank

but it has generated wealth for the shareholders we

expect that it will continue to give good return to the

shareholders

Thank YouThank You