HDFC Bank logged a 1.5% change Friday to close out the week, and is now trading at a price of $65.65 per share.
HDFC Bank returned gains of 24.7% last year, with its stock price reaching a high of $71.76 and a low of $51.04. Over the same period, the stock outperformed the S&P 500 index by 10.0%. More recently, the company's 50-day average price was $67.46. HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The large-cap Finance company is headquartered in Mumbai, India. HDFC Bank has offered a 29.4% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2020-03-31 | 2021-03-31 | 2022-03-31 | |
|---|---|---|---|
| Revenue (MM) | $794,471 | $966,377 | $1,019,414 |
| Interest Income | $561,862,500 | $693,048,100 | $748,839,500 |
| Net Margins | 33.05% | 32.94% | 37.86% |
| Net Income (MM) | $262,573 | $318,332 | $386,000 |
| Depreciation & Amort. | -$12,800,300 | -$13,850,100 | -$16,816,900 |
| Earnings Per Share | $141.81 | $177.06 | $2.55 |
| EPS Growth | n/a | 24.86% | -98.56% |
| Diluted Shares (MM) | 1,835 | 1,841 | 7,792 |
| Free Cash Flow (MM) | -$185,050 | $407,803 | $554,694 |
| Capital Expenditures (MM) | -$16,359 | -$16,962 | -$26,324 |
| Long Term Debt (MM) | $1,446,285 | $1,776,968 | $1,554,333 |
| Net Debt / EBITDA | 1.02 | 0.71 | 0.4 |
HDFC Bank has growing revenues and increasing reinvestment in the business and strong net margins with a stable trend. Additionally, the company's financial statements display low leverage and generally positive cash flows. However, the firm has declining EPS growth.
Trades Below Its Graham Number but Has an Elevated P/E Ratio:
HDFC Bank has a trailing twelve month P/E ratio of 26.5, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of $3.5, the company has a forward P/E ratio of 19.3. The -52.3% compound average growth rate of HDFC Bank's historical and projected earnings per share yields a PEG ratio of -0.51. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing HDFC Bank in terms of its equity because its P/B ratio is 0.21 while the sector average is 1.57. The company's shares are currently trading -92.4% below their Graham number. In conclusion, HDFC Bank's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Most of the Market Indicators on HDFC Bank Are Negative:
The 2 analysts following HDFC Bank have set target prices ranging from $69.9 to $80.0 per share, for an average of $74.95 with a buy rating. As of April 2023, the company is trading -10.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.
The largest shareholder is JP Morgan Chase & Company, whose 2% stake in the company is worth $2,043,523,179.
