Latest News

• On 14th Feb 2024, HDFC bank made its 52 week low with a share price of 1363
• Bank gave Negative 12.38% returns within 1 year. (Mint News)
  
• Meanwhile Domestic Institutional Investors & Foreign Institutional Investors are increasing their stake in the bank in past 2 years.
• Net Profit is almost triple from 2019 (22,446 Cr) to 2024(65,446 Cr)

Why HDFC bank is not performing well in the past 4 years ?

• If we look at the share price in last 4 years it was in consolidation phase, means it is moving in the sideways.
• HDFC bank has given 0% returns in last 4 years.
• It is not only the HDFC bank which has under performed when it comes to the returns but the overall Bank Nifty has not performed in last 1 year
• In COVID time, RBI Repo rate was at 4.4% , since then RBI has increased its REPO rate to 6.5% in 2024 in order to cool down the inflation.
• Due to increase in the REPO rate by 2.1% in 4 years has impacted the overall earnings of the banks.

Lets look at the Fundamental Analysis of the company

Key Ratios

Market Cap	₹ 10,97,792 Cr.
Current Price	₹ 1,445
High/Low	₹ 1,758 / 1,363
Stock PE	17.1
Sector PE	11.3
ROCE	9.50 %
ROE	22.1 %
PEG Ratio	0.73
Debt To Equity	7.39
Sales Growth (5 years)	22%

• Market Cap :~ 11 Lakh Crore, HDFC bank is the Largest Bank in India.
• PEG Ratio: 0.73– The PEG ratio takes into account the expected growth in earnings, providing a more holistic view than just the PE ratio. A ratio below 1 suggests that the stock may be undervalued relative to its expected growth rate, indicating a good investment opportunity.
• Sales Growth (5 years) :22% – This robust growth rate over the past five years indicates that HDFC Bank has achieved consistent expansion in revenue, reflecting a strong business model and growth strategy.

Market Share

• Bank Advances – 15.61%
• Credit Card Transactions- 26.60%
• Debit Card Transactions- 10.5%
• Housing Loan – 23.73%
• Internet Banking – 7.17%
• Mobile Banking Transaction- 12.16%
• Net Interest Income -16.08%
• Large Corporate Banking- 75%

Shareholding Pattern

Change In Shareholding Pattern

	Jun-21	Mar-24	Change
Promoters +	25.89%	0.00%	-25.89%
FIIs +	39.39%	47.83%	8.44%
DIIs +	21.46%	33.33%	11.87%
Government +	0.16%	0.18%	0.02%
Public +	13.10%	18.64%	5.54%

Promoters

• Change: -25.89% (from 25.89% to 0.00%)
• Analysis: Promoters have completely divested their stake in the company during this period. This significant decrease could indicate various scenarios such as a change in ownership, strategic restructuring, or exiting the business.

FIIs (Foreign Institutional Investors)

• Change: +8.44% (from 39.39% to 47.83%)
• Analysis: FIIs have increased their stake by 8.44%, indicating growing interest and confidence from foreign investors. This could suggest positive sentiment towards the company’s performance or market potential.

DIIs (Domestic Institutional Investors)

• Change: +11.87% (from 21.46% to 33.33%)
• Analysis: Domestic institutional investors have significantly raised their stake by 11.87%, indicating strong support and confidence from within the country’s financial institutions. This could imply positive perceptions about the company’s prospects or investment attractiveness.

Government

• Change: +0.02% (from 0.16% to 0.18%)
• Analysis: The government’s stake has seen a marginal increase of 0.02%. While this change is relatively small, it could indicate continued interest or involvement in the company, possibly due to strategic reasons or policy objectives.

Public

• Change: +5.54% (from 13.10% to 18.64%)
• Analysis: Public shareholding has increased by 5.54%, suggesting greater participation from individual and retail investors. This could reflect improved market sentiment, increased liquidity, or a perceived opportunity for growth.

Financial Trend

Sales:

• March 2020 Sales: ₹122,189
• March 2024 Sales: ₹283,649
• Sales: Increased by approximately 132.05%.

Net Profit:

• March 2020 Net Profit: ₹27,254
• March 2024 Net Profit: ₹64,062
• Net Profit: Increased by approximately 134.93%.

Company Valuation

• When we look at the company’s stock price for the past 4 years, it was trading in the same range
• In last 4 years stock price gave almost 0% returns
• Resistance level =1716 & Support level =1290 & this resistance is going to breakout soon.

Price Chart (5 years)

Median PE

• Current PE- 17 (Blue Line)
• Median PE -25.4 (Red Line)
• Company is currently trading at 10 year lowest valuation
• Company is undervalued

Share Price Target

Year	CAGR
1 Year	-13.02%
5 Years	4.60%
10 Years	13.82%
20 Years	22.50%

• For the last 4 years company has given almost 0% returns
• Within next 2 years share price might get doubled to 3000 level (Assumption)
• After 2 years means, from 2027 company can give CAGR of 17%  (Assumption)
• Price Target Graph (A= Actual Share Price) (F=Foretasted Share Price)

Should You Invest ?

• Being the Largest Bank in India, this blue-chip stock has not performed well in last 4 years so it will perform really good in the coming 22 years
• In last 5 years, Sales & Net Profit has more than doubled but stock price gave only 4.6% CAGR
• Overall Bank Nifty is trading at a lower valuation in last 5 years
• Many largecap stocks have not given any good run up in the market so these large cap will perform well.
• Company is fundamentally strong as per the balance sheet
• If you are thinking of the long term you can definitely think of this company in your portfolio

Check out this- Kotak Mahindra Bank Fundamental Analysis

Disclaimer

• This article is a complete guide about HDFC Bank Ltd.
• These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
• Also, We have talked in detail about the share’s future prospects and growth potential.
• Hopefully, this information will help you in your further investment.
• If you have any further queries, please comment below. We will be happy to answer all your questions.
• If you like this information, share the article with as many people as possible