HDFC
Content
SCMS COCHIN PGDM (I&B), Batch 19
Varun Kumar FN -153
Date of Submission: 22 / 09 / 2011
Q. Brief history of the company and its parent group? A. HDFC Bank Limited is a major Indian financial services company based in India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has1, 725 branches and over 5,000 ATMs, in 780 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of 2,244.9crore (US$498.37 million), up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at19, 622.8crore (US$4.36 billion) in 2008-09.
It is one of the Big Four banks of India, along with State Bank of India, ICICI Bank and Punjab National Bank its main competitors. HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation Limited (HDFC), India’s largest housing finance company. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI)to set up a bank in the private sector. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI's liberalization policies. Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a base of about Rs. 1, 22,000 crore and net advances of aboutRs.89, 000 crore. The balance sheet size of the combined entity is more than Rs. 1, 63,000 crore.
Q. List of products & services. A. The product and services of HDFC Bank are: Finance and Insurance. Investment Banking. Commercial Banking. Retail Banking. Private Banking. Asset Management. Mortgages. Credit Q. Branches / Network of the company. A.
Location Type Head Office Address Ramon House , 5th Floor, 169, Backbay Reclamation Mumbai - 400020 Maharashtra - India Phone : 22850032 Fax : 22046758-22046834 Email : [email protected] Internet : N.A. Royal Arcade Kormangala Indl Area Bangalore - 560095 Karnataka - India Phone : 5521227 Fax : 5521224 Email : N.A. Internet : N.A. Rohini Sodepur Road 24 Parganas - 0 West Bengal - India Phone : 5387171 Fax : 5379071 Email : N.A. Internet : N.A. HDFC Bank House Senapati Bapat Marg Lower Parel Mumbai - 400013 Maharashtra - India Phone : 66521000 Fax : 24960737 Email : [email protected]
Branch Office
Branch Office
Registered Office
Internet : N.A. Branch Office Tirupati Apartments Mumbai - 400026 Maharashtra - India Phone : 24962525,24961318 Fax : 24961383 Email : N.A. Internet : N.A. 17 Central Markets New Delhi - 110026 Delhi - India Phone : 25451653 Fax : 25468394 Email : N.A. Internet : N.A. ITC Centre 759 Chennai (Madras) - 600002 Tamil Nadu - India Phone : 8551212 Fax : 8591865 Email : N.A. Internet : N.A. HDFC Bank House, Senapati Bapat Marg, Lower Parel Mumbai - 400013 Maharashtra - India Phone : 66521000, 24988484 Fax : 24960737, 24965235 Email : [email protected] Internet : N.A.
Branch Office
Branch Office
Registered Office
Q. CEO / Head of the company
Name C M Vasudev Harish Engineer Renu Karnad Pandit Palande Bobby Parikh Name Aditya Puri Paresh Sukthankar Ashim Samanta Partho Datta Anami N Roy Designation Chairman / Chair Person Executive Director Director Director Director Designation Managing Director Executive Director Director Director Director
Q. A brief note on the company from the point of view of their respective specializations & performance.
A. RESPECTIVE SPECILIZATION Wholesale banking: HDFCB offers wide array commercial banking products and transactional services to the corporate. The target market of HDFCB is large private sector business houses, large public sector enterprises and multinational corporations, as well as leading small and mid-sized businesses. Retail banking: HDFCB is the one-stop shop for all the financial needs of upper and middleincome individuals. HDFCB is among the top three players in auto loans, personal loans, two wheeler loans, commercial vehicles, cash management and supply chain management. Retail advances constitutes 62% of the total advances. Treasury: Treasury group of banks manages bank’s balance sheet including maintenance of reserve requirements and management of market and liquidity risk. Treasury group provides advice and execution services to its corporate and institutional customers with respect to their foreign exchange and derivatives transactions securities. PERFORMANCE Consistent Earnings Growth: HDFC Bank has been consistent in its earnings delivery by delivering profit growth of 34% on an average over the past seven years. With a rich deposit franchise and high credit quality, we expect the earnings to grow at 33% for the next two years. Rich Deposit Franchise: The bank is better equipped to manage a rising interest rate scenario because of its high CASA deposit base of 52% which is higher than
the industry average of 34%. This will enable the bank to maintain a NIM of 4% going forward. Superior Asset Quality: HDFC Bank has the reputation of being the cleanest bank in India. With advances growing at a CAGR 45% for the last 7 years, its net NPA ratio is below 1%. We expect the advances to grow at 33% CAGR going forward. Nationwide Presence: The bank has a strong network of 1229 branches with 2526 ATMs spread across India and has received the RBI approval for addition of over 200 branches in FY09. Synergies from CBOP Merger: While CBOP merger has put in some pressure on NIM, CASA and NPAs, in a longer term, HDFC Bank is expected to benefit from the added strength in branches and access to SME sector loan portfolio. Attractive Valuations: Historically the bank has enjoyed higher premium over its peers due to healthy asset quality and a dynamic and proactive management. We find current valuations attractive considering the strong growth prospects by factoring in the merger risk. We initiate coverage with a BUY rating at a target price of Rs.1517 (25% upside).
Varun Kumar FN -153
Date of Submission: 22 / 09 / 2011
Q. Brief history of the company and its parent group? A. HDFC Bank Limited is a major Indian financial services company based in India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has1, 725 branches and over 5,000 ATMs, in 780 cities in India, and all branches of the bank are linked on an online real-time basis. As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of 2,244.9crore (US$498.37 million), up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at19, 622.8crore (US$4.36 billion) in 2008-09.
It is one of the Big Four banks of India, along with State Bank of India, ICICI Bank and Punjab National Bank its main competitors. HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation Limited (HDFC), India’s largest housing finance company. It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI)to set up a bank in the private sector. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI's liberalization policies. Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a base of about Rs. 1, 22,000 crore and net advances of aboutRs.89, 000 crore. The balance sheet size of the combined entity is more than Rs. 1, 63,000 crore.
Q. List of products & services. A. The product and services of HDFC Bank are: Finance and Insurance. Investment Banking. Commercial Banking. Retail Banking. Private Banking. Asset Management. Mortgages. Credit Q. Branches / Network of the company. A.
Location Type Head Office Address Ramon House , 5th Floor, 169, Backbay Reclamation Mumbai - 400020 Maharashtra - India Phone : 22850032 Fax : 22046758-22046834 Email : [email protected] Internet : N.A. Royal Arcade Kormangala Indl Area Bangalore - 560095 Karnataka - India Phone : 5521227 Fax : 5521224 Email : N.A. Internet : N.A. Rohini Sodepur Road 24 Parganas - 0 West Bengal - India Phone : 5387171 Fax : 5379071 Email : N.A. Internet : N.A. HDFC Bank House Senapati Bapat Marg Lower Parel Mumbai - 400013 Maharashtra - India Phone : 66521000 Fax : 24960737 Email : [email protected]
Branch Office
Branch Office
Registered Office
Internet : N.A. Branch Office Tirupati Apartments Mumbai - 400026 Maharashtra - India Phone : 24962525,24961318 Fax : 24961383 Email : N.A. Internet : N.A. 17 Central Markets New Delhi - 110026 Delhi - India Phone : 25451653 Fax : 25468394 Email : N.A. Internet : N.A. ITC Centre 759 Chennai (Madras) - 600002 Tamil Nadu - India Phone : 8551212 Fax : 8591865 Email : N.A. Internet : N.A. HDFC Bank House, Senapati Bapat Marg, Lower Parel Mumbai - 400013 Maharashtra - India Phone : 66521000, 24988484 Fax : 24960737, 24965235 Email : [email protected] Internet : N.A.
Branch Office
Branch Office
Registered Office
Q. CEO / Head of the company
Name C M Vasudev Harish Engineer Renu Karnad Pandit Palande Bobby Parikh Name Aditya Puri Paresh Sukthankar Ashim Samanta Partho Datta Anami N Roy Designation Chairman / Chair Person Executive Director Director Director Director Designation Managing Director Executive Director Director Director Director
Q. A brief note on the company from the point of view of their respective specializations & performance.
A. RESPECTIVE SPECILIZATION Wholesale banking: HDFCB offers wide array commercial banking products and transactional services to the corporate. The target market of HDFCB is large private sector business houses, large public sector enterprises and multinational corporations, as well as leading small and mid-sized businesses. Retail banking: HDFCB is the one-stop shop for all the financial needs of upper and middleincome individuals. HDFCB is among the top three players in auto loans, personal loans, two wheeler loans, commercial vehicles, cash management and supply chain management. Retail advances constitutes 62% of the total advances. Treasury: Treasury group of banks manages bank’s balance sheet including maintenance of reserve requirements and management of market and liquidity risk. Treasury group provides advice and execution services to its corporate and institutional customers with respect to their foreign exchange and derivatives transactions securities. PERFORMANCE Consistent Earnings Growth: HDFC Bank has been consistent in its earnings delivery by delivering profit growth of 34% on an average over the past seven years. With a rich deposit franchise and high credit quality, we expect the earnings to grow at 33% for the next two years. Rich Deposit Franchise: The bank is better equipped to manage a rising interest rate scenario because of its high CASA deposit base of 52% which is higher than
the industry average of 34%. This will enable the bank to maintain a NIM of 4% going forward. Superior Asset Quality: HDFC Bank has the reputation of being the cleanest bank in India. With advances growing at a CAGR 45% for the last 7 years, its net NPA ratio is below 1%. We expect the advances to grow at 33% CAGR going forward. Nationwide Presence: The bank has a strong network of 1229 branches with 2526 ATMs spread across India and has received the RBI approval for addition of over 200 branches in FY09. Synergies from CBOP Merger: While CBOP merger has put in some pressure on NIM, CASA and NPAs, in a longer term, HDFC Bank is expected to benefit from the added strength in branches and access to SME sector loan portfolio. Attractive Valuations: Historically the bank has enjoyed higher premium over its peers due to healthy asset quality and a dynamic and proactive management. We find current valuations attractive considering the strong growth prospects by factoring in the merger risk. We initiate coverage with a BUY rating at a target price of Rs.1517 (25% upside).
