HDFC Bank Limited (HDB)
Financial Services · NYQ · US
Fundamentals
Valuation and ratings
HDFC Bank Limited trades at USD26.31, close to the USD28.04 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 46 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 18.6 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About HDFC Bank Limited
HDFC Bank Limited provides banking and financial products and services to individuals and businesses in India, Bahrain, Hong Kong, Singapore, and Dubai. The company operates through Treasury, Retail Banking, Wholesale Banking, Other Banking Business, Insurance Business, and Other segments. It offers savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car and pre owned car, marriage, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, mutual funds, and car; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital, term loans, supply chain management, project finance, export finance, commercial vehicle / equipment finance, tractor finance, infrastructure, and agriculture finance. In addition, it offers credit, debit, prepaid, forex, and kisan gold cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; and insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, custodial, and documents collection services; online, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; channel financing, vendor financing, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services; and financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.
HDB passes 2 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
23 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Ken Fisher, Fisher Asset Management, LLC$304.26M · 0.1% of book
- Baillie Gifford, BAILLIE GIFFORD & CO$162.69M · 0.2% of book
- Dodge & Cox, DODGE & COX$141.52M · 0.1% of book
- Israel Englander, MILLENNIUM MANAGEMENT LLC$120.25M · 0.1% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$103.27M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is HDFC Bank Limited (HDB) undervalued?
Against our discounted cash flow estimate of USD28.04, HDB at USD26.31 is 7% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own HDB?
23 of the institutions we track reported a position in HDB in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is HDB's P/E ratio?
HDB trades at 18.6 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for HDB, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.