HDFC Bank is one of the largest private-sector banks in India. It offers an array of banking and financial services like savings and current account, deposits, loans, wealth management, mutual funds, insurance, investments, insurance, foreign exchange, and more.
The bank caters to a broad spectrum of clients, ranging from NRI and personal to premier, SME, corporate, wholesale and agriculture.
Performance of the Bank
The performance of the bank can be broken down into four distinct segments – business, financials, asset quality, and stock.
Let us take a look at the three sectors individually. All of the important metrics have been explained with respect to the quarter ended on June 30, 2018.
HDFC Bank Business Growth
For the Q1 FY 2018-19, HDFC Bank reported its balance sheet size to be at Rs.1,080,409 crore in comparison to Rs.895,653 crore reported as on June 30, 2017. On a YoY basis, it marked an increase of 20.6% in the size of its balance sheet.
Of this, the bank’s total deposits were reported to be worth Rs.805,785 crore – an improvement of 20% over the figure reported for the same period last year.
The term deposits registered a growth of 24.9% over the previous year while savings account deposits grew by 17.4% YoY. The current account deposits were reported to be worth Rs.109,297 crore. The CASA ratio for the bank was 41.7% as on June 30, 2018.
Similarly, the bank’s total advances registered a growth of 22% YoY, from Rs.580,976 crore to Rs.708,649 crore.
The bank maintained a Capital Adequacy Ratio (CAR) of 14.6%, as per the Basel III guidelines. This is against the regulatory requirement of 11.025%.
HDFC Bank Financial Performance
For the quarter ended on June 30, 2018, HDFC Bank reported its total income from operations to be at Rs.26,367 crore.
In comparison to the same period last year, this figure has increased by 18.8%. Considering the net interest income, it was stated to be at Rs.10,813.6 crore – a growth of 15.4% YoY.
As for the provisions and contingencies for the June quarter of the financial year 2018-19, the bank allocated a total of Rs.1,629.4 crore as against Rs. 1,558.8 crore for the June quarter of the previous year.
Consequently, the profit before tax (PBT) for the June quarter was stated to be at Rs.7,018.4 crore as against a PBT of Rs.5,961 crore reported for the same period last year.
After accounting for taxation, the net profit was reported to be Rs.4,601.4 crore – an increase of 18.2% YoY. The company’s basic earnings per share (EPS) also moved up from Rs.15.2 to Rs.17.7 YoY.
The asset quality of HDFC Bank is undoubtedly the best in India, especially in comparison to the Indian public-sector banks.
For the quarter ended on June 30, 2018, the gross non-performing assets (NPA) ratio was reported to be 1.33%, as against 1.24% reported for the same period last year. Considering its Net NPA, it was reported to be at 0.41% for the period.
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HDFC Bank Stock Trends
HDFC Bank is considered to be one of the top performing stocks in India. The company has grown like clockwork, year-after-year to become one of the best banks in the country. Its splendid business performance has been reflected in its stock as well.
The comprises two prominent stock market indices – Nifty 50 and S&P BSE Sensex. In addition to this, it also forms various other indices such as Nifty 100, Nifty Bank, S&P BSE AllCap, S&P BSE LargeCap, S&P BSE Finance, and many more.
- At the start of 2016, the stock price of HDFC Bank was varying at levels close to Rs.1,050. Over the course of the year, they moved up steadily and cautiously to gain a little over 15%. Eventually, the scrip managed to end the year at Rs.1,206 on the NSE.
- In 2017, the rise was far more discernible. The HDFC Bank shares commenced the year trading at levels close to Rs.1,200. By early May, the same had gained a little over 20% to cross the Rs.1,500 mark. In the second half of the year, the prices stabilised at levels above Rs.1,750. In this period, there was no sharp rise in the scrip as the price continued to move up firmly. The closing price at the end of the year was Rs.1,872.40 on the NSE.
- In 2018, the stock price of HDFC Bank crossed the psychologically important mark of Rs.2,000 for the first time in its history. It subsequently moved on to reach its 52-week high at Rs.2,220 before descending back to its previous levels at Rs.1,950. Interestingly enough, it is one of the few stocks in the Indian markets that hasn’t been impacted severely this year.
- In terms of dividend, the bank has announced a dividend every year since its debut on the bourses. In 2017, it announced a final dividend of 550% while in 2018, the same was moved up to 650% – the highest in the company’s history. It is also worth noting that the percentage of the dividend has gone up, YoY.
The bottom line is yes. From a long-term perspective, HDFC Bank shares make for a terrific buy. The bank has an excellent reputation in the country and is backed by a strong management team.
Its business has grown remarkably every year – it is the largest bank in India in terms of balance sheet and market capitalisation. Furthermore, HDFC Bank boasts of an impeccable asset quality at a time when a majority of banks in India are struggling with bad loans.
To know more about current HDFC Bank share price you can visit the website like Bankbazaar.com going through will help investors a great deal.
However, at its present levels, the stock may appear to be slightly expensive. You can wait for it to correct and accumulate it in dips.
Alternately, you can also look at mutual funds that have holdings in this particular scrip. Whatever may be the case, it is strongly recommended that you research thoroughly before investing.