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HDFCBank: LongTerh Gr 22 CAGR

Lesson 214/225 | Study Time: 5 Min

Course: Top Quality Companies

One of the best among the Indian banking Industry with 5500 branches across 2800 cities. This bank was not even in the TOP 15 companies a decade back and today is No#1 as per the free-float Market Cap. Very high growth, best margin and least NPA. Consistently giving good results for the last 2 decades. Far further than 2nd Biggest bank ICICI Bank. India has transformed from a 0.5 trillion to 2.8 Trillion economy and the major Bank has cashed this Boom. HdfcBank was having revenue and profits of around 1500 cr and 200 cr during the year 2000. We may see HDFCBank enter the elite club companies of India with Profit of more than 1 lakh cr till 2030, 1st Indian bank to see this profit. Today Hdfcbank generates around 1.5 lakh cr revenue. Better managing sales along with professionally managed Gross NPA (around 1.08%) has helped Hdfcbank cross 25000 Cr profit-making club where just 3-5 Indian Companies are there. Investment of 1 Lakh done 2 decades back is today 2.75 crore along with consistent dividends. All those holding for a long time, no need to worry as Economy if moving from 3 tr to 5 tr till 2025, majority of the banks with good management will be again able to cash the boom. We should remember Boom of China has helped the I&C Bank of China reach a Profit of around 3 lakh Cr. Today China has 4 Banks which are making Profits of more than 2 lakh Cr v/s our top private bank not even having 2 lakh cr sales. This difference should be filled in the coming 10-15 years.

Post COVID 9M results are declared with growth in revenue & net Profit at 6% & 19% respectively which was little better than expected. Should not forget that Moratorium announced by RBI between March to August has paused the real GNPA, As per RBI NPA shall not be declared till further notice by SupremeCourt. Still Real GNPA if declared should be 1.38% instead of 1.08%. Better managed NPA. Considering the current 9M result and considering post moratorium data once announced new buying can be done near 1300 (Upgraded from 1000 to 800) and some profit 5-10% can be booked during the current rally at 1800. Loan growth, 3rd party products, usage of debit and credit cards was affected post corona. Effect of Corona depends on future developments. Should expect this bank to cross even profits of 1 Lakh Cr around 2030 which can help create huge wealth. It's good seeing many people from you holding this stock for many years and have already created huge wealth by SIP. Hdfc is the Promoter with a 26% stake while MF & Insurance Companies hold around 17% stake along with FPI 39%. LIC is an old shareholder of HDFC and has added 20 lakh shares during 2014 around 600, they still hold around 5.58 cr shares. New buying again can be done during any fall below 1300 with the target of 8000 in 2030 with consistent Earnings.

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Piyush Patel

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