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					                                                                                             4QFY2012 Result Update | Banking
                                                                                                                      April 18, 2012



 HDFC Bank                                                                                 ACCUMULATE
                                                                                           CMP                                  `537
 Performance Highlights                                                                    Target Price                         `567
  
 Particulars (` cr)     4QFY12       3QFY12       % chg (qoq)     4QFY11    % chg (yoy)    Investment Period             12 months
 NII                       3,388        3,116              8.7      2,839         19.3
                                                                                           Stock Info
 Pre-prov. profit          2,413        2,378              1.5      2,097         15.1
 PAT                       1,453        1,430              1.6      1,115         30.4     Sector                              Banking
 Source: Company, Angel Research                                                           Market Cap (` cr)                   125,994

 For 4QFY2012, HDFC Bank reported healthy 30.4% yoy growth in its net profit to            Beta                                    1.0
 `1,453cr, in-line with ours as well as street’s estimates. Improved margins on the        52 Week High / Low                540/400
 back of higher CASA floats and traction in retail loan book along with strong             Avg. Daily Volume                   221,785
 network expansion during the quarter were the key highlights of the result.               Face Value (`)                           2
 We maintain our Accumulate recommendation on the stock.
                                                                                           BSE Sensex                           17,392
 Another quarter of steady performance: HDFC Bank’s net advances growth was
                                                                                           Nifty                                 5,300
 strong at 22.2% yoy, while deposit buildup was also healthy, growing by 18.3%
                                                                                           Reuters Code                   HDBK.BO
 yoy. Adjusting for one-off spike in current account deposits in 4QFY2011, deposit
 growth stood at 20.6% yoy for 4QFY2012. The bank was the collecting banker                Bloomberg Code                HDFCB@IN
 for issuance of tax-free bonds for some of the issuers in 4QFY2012, which led to
 higher CASA floats (current account deposits up 11.9% qoq) during the quarter.
 Higher CASA floats coupled with increased traction in retail loan book (up 6.8%           Shareholding Pattern (%)
 qoq) and run-down of some of the short-term low-yielding corporate loans led to           Promoters                              23.2
 higher margins (4.2%) for the bank during 4QFY2012. Fee income growth for the             MF / Banks / Indian Fls                10.9
 bank in 4QFY2012 was healthy at 25.4% yoy, primarily due to strong
                                                                                           FII / NRIs / OCBs                      47.4
 performance on commission-based fee income (issuance of tax-free bonds aided
                                                                                           Indian Public / Others                 18.5
 fee income growth during 4QFY2012). The bank maintained its strong asset-
 quality track record during 4QFY2012 as well, with gross and net NPA ratios
 remaining stable at 1.0% and 0.2%, respectively. The bank added 343 branches
 during 4QFY2012, taking its total branch additions to 558 for FY2012                      Abs. (%)             3m       1yr       3yr
 (compared to average annual addition of 200-300 branches). The strong                     Sensex               5.6   (9.0)       57.8
 increase in branch network coupled with processing fees on issuance of tax-free           HDFC Bank           14.9   14.3       151.3
 bonds led to higher operating expenses for the bank during 4QFY2012.
 Outlook and valuation: HDFC Bank is currently trading at one-year forward
 3.6x P/ABV (3.1x FY2014 ABV), higher than its median of 3.5x (over FY2005-12).
 We believe current valuations largely factor in the positives, leaving only a limited
 upside in the stock. We value the stock at 3.3x FY2014 P/ABV. Hence, we
 recommend Accumulate on the stock with a target price of `567 (5.5% upside).
 Key financials
 Y/E March (` cr)                    FY2011        FY2012         FY2013E    FY2014E
 NII                                  10,543        12,297         15,203      19,108
 % chg                                   25.7          16.6          23.6         25.7
 Net profit                             3,926        5,167          6,641       8,335
 % chg                                   33.2          31.6          28.5         25.5
 NIM (%)                                  4.4           4.3           4.3          4.3    Vaibhav Agrawal
 EPS (`)                                 16.9          22.0          28.3         35.5    022 – 3935 7800 Ext: 6808
 P/E (x)                                 31.8          24.4          19.0         15.1    vaibhav.agrawal@angelbroking.com

 P/ABV (x)                                4.9           4.3           3.7          3.1
                                                                                          Varun Varma
 RoA (%)                                  1.6           1.7           1.7          1.7
                                                                                          022 – 3935 7800 Ext: 6847
 RoE (%)                                 16.7          18.9          20.8         22.1    varun.varma@angelbroking.com
 Source: Company, Angel Research
Please refer to important disclosures at the end of this report                                                                     1
                                                        HDFC Bank | 4QFY2012 Result Update



                 Exhibit 1: 4QFY2012 performance
                 Particulars (` cr)                4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
                 Interest earned                    7,388      7,203         2.6      5,469         35.1
                 - on Advances / Bills              5,610      5,417         3.6      4,151         35.2
                 - on investments                   1,728      1,748        (1.1)     1,297         33.3
                 - on balance with RBI & others        45             35    29.4           19      140.2
                 - on others                            5             3     67.6            2      108.8
                 Interest Expended                  4,000      4,087        (2.1)     2,629         52.1
                 Net Interest Income                3,388      3,116         8.7      2,839         19.3
                 Other income                       1,492      1,420         5.1      1,256         18.8
                 Other income excl. treasury        1,563      1,502         4.1      1,247         25.4
                 - Fee & commission income          1,237      1,128         9.7      1,001         23.7
                 - Treasury income                    (72)       (82)      (12.6)           9     (931.4)
                 - Forex & derivative income          325        366       (11.1)         245       32.5
                 Operating income                   4,880      4,536         7.6      4,095         19.2
                 Operating expenses                 2,467      2,158        14.3      1,998         23.5
                 - Employee expenses                  928        867         7.0          733       26.6
                 - Other Opex                       1,539      1,291        19.2      1,265         21.6
                 Pre-provision Profit               2,413      2,378         1.5      2,097         15.1
                 Provisions & Contingencies           298        329        (9.4)         431      (30.8)
                 PBT                                2,115      2,049         3.2      1,666         27.0
                 Provision for Tax                    662        619         6.9          551       20.2
                 PAT                                1,453      1,430         1.6      1,115         30.4
                 Effective Tax Rate (%)              31.3        30.2      107bp          33.1   (178)bp
                 Source: Company, Angel Research


                 Exhibit 2: 4QFY2012 – Actual vs. estimates
                 Particulars (` cr)                          Actual         Estimates            Var. (%)
                 Net interest income                         3,388             3,257                 4.0
                 Other income                                1,492             1,471                 1.5
                 Operating income                            4,880             4,727                 3.2
                 Operating expenses                          2,467             2,259                 9.2
                 Pre-prov. profit                            2,413             2,468                (2.2)
                 Provisions & cont.                            298                  337           (11.5)
                 PBT                                         2,115             2,131                (0.7)
                 Prov. for taxes                               662                  680             (2.7)
                 PAT                                         1,453             1,451                 0.1
                 Source: Company, Angel Research




April 18, 2012                                                                                          2
                                                       HDFC Bank | 4QFY2012 Result Update



                 Exhibit 3: 4QFY2012 performance analysis
                 Particulars                       4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy)
                 Balance sheet
                 Advances (` cr)                   195,420 194,303        0.6 159,983        22.2
                 Deposits (` cr)                   246,706 232,508        6.1 208,586        18.3
                 Credit-to-Deposit Ratio (%)          79.2     83.6   (436)bp     76.7     251bp
                 Current deposits (` cr)            45,408   40,576      11.9   46,460       (2.3)
                 Saving deposits (` cr)             73,998   70,330       5.2   63,448       16.6
                 CASA deposits (` cr)              119,406 110,906        7.7 109,908         8.6
                 CASA ratio (%)                       48.4     47.7     70bp      52.7    (429)bp
                 CAR (%)                              16.5     16.3     20bp      16.2      30bp
                 Tier 1 CAR (%)                       11.6     11.2     40bp      12.2     (60)bp
                 Profitability Ratios (%)
                 Reported NIM                          4.2      4.1     10bp       4.4     (20)bp
                 Cost-to-income ratio                 50.6     47.6    298bp      48.8     175bp
                 Asset quality
                 Gross NPAs (` cr)                   1,999    2,021     (1.0)    1,694       18.0
                 Gross NPAs (%)                        1.0      1.0     (1)bp      1.1      (3)bp
                 Net NPAs (` cr)                      352      398     (11.5)     296        18.9
                 Net NPAs (%)                          0.2      0.2      0bp       0.2       0bp
                 Provision Coverage Ratio (%)         82.4     80.3    207bp      82.5     (13)bp
                 Source: Company, Angel Research


                 Balance sheet growth above industry; NIM expands sequentially

                 HDFC Bank’s net advances growth was strong at 22.2% yoy, while deposit buildup
                 was also healthy, growing by 18.3% yoy. Adjusting for one-off spike in current
                 account deposits in 4QFY2011, deposit growth stood at 20.6% yoy for 4QFY2012.

                 The bank witnessed healthy traction in its retail loan portfolio (up 6.8% qoq),
                 primarily due to increased demand for home loans (up 8.6% qoq), credit card
                 loans (up 7.8% qoq), business banking (up 7.4% qoq) and personal loans
                 (up 5.9% qoq). The bank ran down some of the low-yielding short-term corporate
                 loans, which led to a sequential 6.0% contraction in the corporate loan book. The
                 share of retail to overall loan book (on net advances basis) increased from 51.6%
                 in 3QFY2012 to 54.8% for 4QFY2012, which should help sustain margins for the
                 bank in the coming few quarters.

                 The bank was the collecting banker for issuance of tax-free bonds for some of the
                 issuers in 4QFY2012, which led to higher CASA floats (current account deposits up
                 11.9% qoq) during the quarter. Higher CASA floats coupled with increased traction
                 in retail loan book and run-down of some of the short-term low-yielding corporate
                 loans led to higher margins (4.2%) for the bank during 4QFY2012.




April 18, 2012                                                                                   3
                                                                                                               HDFC Bank | 4QFY2012 Result Update



                                                                   Exhibit 4: Healthy growth in retail loans in spite of high interest rates
                                                                   Particulars (` cr)         4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) % to total
                                                                   Auto Loans                     26,398    25,762           2.5   22,134           19.3          24.6
                                                                   CVCE                           13,050    12,604           3.5     8,177          59.6          12.2
                                                                   Two Wheelers                    2,537     2,405           5.5     1,992          27.4           2.4
                                                                   Personal Loans                 13,891    13,112           5.9   10,276           35.2          13.0
                                                                   Business Banking               18,639    17,358           7.4   14,997           24.3          17.4
                                                                   Loans Against Securities        1,046     1,034           1.2     1,151         (9.1)           1.0
                                                                   Credit Cards                    6,960     6,459           7.8     4,873          42.8           6.5
                                                                   Home loans                     14,259    13,128           8.6   11,490           24.1          13.3
                                                                   Others                         10,346     8,485          21.9     5,023         106.0           9.7
                                                                   Retail Advances            107,126 100,347                6.8   80,113           33.7         100.0
                                                                   Source: Company, Angel Research


                                                                   The bank was able to maintain a healthy CASA ratio of 48.4% (as of FY2012),
                                                                   primarily due healthy 16.6% yoy growth in its savings account deposits (average
                                                                   daily CASA balances at 47.3% of overall deposits in FY2012). The pace of CASA
                                                                   deposits accretion for the bank has moderated considerably over the past several
                                                                   quarters; however, this decline can mainly be attributed to the high fixed deposit
                                                                   interest rates over the past one year. With interest rates expected to have a
                                                                   downward trajectory over the next two years, we expect the bank to perform well
                                                                   on the CASA front (factored in 24% CAGR growth over FY2012-14 in saving banks
                                                                   account deposits).

                                                                   The bank added 343 branches during 4QFY2012 (558 in FY2012), taking its total
                                                                   branch additions to 558 for FY2012 (compared to average annual addition of
                                                                   200-300 branches). The bank also added 1,803 ATMs during 4QFY2012 vs.
                                                                   average quarterly additions of ~400 ATMs over the past two years. The bank also
                                                                   increased its presence in over 400 cities during FY2012 (currently operating in
                                                                   1,399 cities as compared to 996 as of FY2011). The bank’s increased geographic
                                                                   presence along with healthy network expansion should aid in maintaining above
                                                                   system-average retail loan growth for the bank on the asset side and CASA
                                                                   accretion on the liability side.


Exhibit 5: YoY advances growth trends                                                     Exhibit 6: Reported NIM remains above 4%
  (%)      4QFY11           1QFY12              2QFY12      3QFY12               4QFY12     (%)
  40.0                                                                                      4.3
                                                                                                      4.2            4.2                                   4.2
  30.0                                                                                      4.2
                                                                                                                               4.1           4.1
  20.0                                                                                      4.1

  10.0                                                                                      4.0
             27.1

                    20.0

                           20.0

                                  22.1

                                         22.2




                                                     24.6

                                                            15.4

                                                                   18.1

                                                                          21.0

                                                                                 18.3




    -                                                                                       3.9
                     Advances                                 Deposits                              4QFY11      1QFY12       2QFY12      3QFY12       4QFY12


Source: Company, Angel Research                                                           Source: Company, Angel Research




April 18, 2012                                                                                                                                                      4
                                                                                                              HDFC Bank | 4QFY2012 Result Update



Exhibit 7: CASA ratio marginally up sequentially                               Exhibit 8: CASA growth remains on a moderating path
 (%)                                                                                                          CASA growth (%)                                 SA growth (%)
 55.0                                                                            50.0       42.9
            52.7
                                                                                 40.0
 50.0                  49.1                                                      30.0       37.5
                                                                  48.4
                                      47.3         47.7                                                                                                                                         16.6
                                                                                 20.0

 45.0                                                                            10.0
                                                                                                                                                                                                8.6
                                                                                   -




                                                                                            4QFY10


                                                                                                         1QFY11


                                                                                                                     2QFY11


                                                                                                                                  3QFY11


                                                                                                                                               4QFY11


                                                                                                                                                           1QFY12


                                                                                                                                                                      2QFY12


                                                                                                                                                                                       3QFY12


                                                                                                                                                                                                 4QFY12
 40.0
           4QFY11    1QFY12       2QFY12         3QFY12         4QFY12


Source: Company, Angel Research                                                Source: Company, Angel Research



Exhibit 9: Healthy capital adequacy                                            Exhibit 10: 343 branches added during 4QFY2012
                     Tier-I CAR (%)     Tier-II CAR (%)                                                            Branches                             ATMs (RHS)
  20.0                  16.9                                                                                                                                             8,913
             16.2                      16.5         16.3           16.5        3,000                                                                                                            9,500

  15.0                                                                                                                                                  7,110
             4.0         5.5           5.1           5.1            4.9        2,500                                               6,520                                                        7,500
                                                                                                                  5,998
                                                                                            5,471
  10.0                                                                         2,000                                                                                                            5,500

             12.2       11.4           11.4         11.2           11.6
   5.0                                                                         1,500
                                                                                               1,986



                                                                                                                   2,111



                                                                                                                                       2,150



                                                                                                                                                          2,201



                                                                                                                                                                               2,544
                                                                                                                                                                                                3,500

       -                                                                       1,000                                                                                                            1,500
           4QFY11     1QFY12          2QFY12      3QFY12          4QFY12                4QFY11 1QFY12 2QFY12 3QFY12 4QFY12


Source: Company, Angel Research                                                Source: Company, Angel Research


                                                          Other income growth picks up on commission-based fee income
                                                          Fee income growth for the bank in 4QFY2012 was healthy at 25.4% yoy, primarily
                                                          due to strong performance on commission-based fee income (issuance of tax-free
                                                          bonds aided fee income growth during 4QFY2012). The bank’s major proportion
                                                          of fee income (~85%) comes from the retail asset side. Strong growth in retail loan
                                                          book over the past year coupled with potential fee income revenue from new
                                                          branches (though with a lag) should help the bank maintain its fee income to
                                                          average assets at 1.7% over FY2013-14 (fee income at 1.7% of ATA for FY2012).

                                                          Exhibit 11: Sharp uptick in commission-based income sequentially
                                                          Particulars (` cr)                4QFY12                3QFY12              % chg (qoq)                   4QFY11              % chg (yoy)
                                                          Fees & Commission                      1,237               1,128                              9.7          1,001                        23.7
                                                          Treasury Income                              (72)                (82)                         NA                     9                     NA
                                                          Forex Income & Others                        325                 366                   (11.1)                245                        32.5
                                                          Other                                          1                    9                  (88.6)                        1                (18.3)
                                                          Other income                           1,492               1,420                              5.1          1,256                        18.8
                                                          Other income excl. treasury            1,563               1,502                              4.1          1,247                        25.4
                                                          Source: Company, Angel Research




April 18, 2012                                                                                                                                                                                            5
                                                       HDFC Bank | 4QFY2012 Result Update



                 Asset quality remains largely stable
                 The bank maintained its strong asset quality track record during 4QFY2012 as
                 well. The bank’s slippage ratio for FY2012 was low at 1.0% (1.1% in FY2011 and
                 2.6% in FY2010). Gross and net NPA ratios remained stable at 1.0% and 0.2%,
                 respectively. NPA provision coverage ratio remained at elevated levels at 82.4%,
                 even without considering the floating provisions (`180cr worth of floating
                 provisions made during 4QFY2012, taking the total floating provisions to
                 `1,435cr). Restructured advances for the bank remained stable at 0.4% of gross
                 advances.

                 Exhibit 12: Stable asset quality
                              Gross NPAs (%)           Net NPAs (%)               PCR (Calc, %, RHS)
                  1.2                                                                                  90.0

                            82.5           82.6                                         82.4
                                                        81.3           80.3
                  0.9
                                                                                                       80.0

                  0.6

                                                                                                       70.0
                  0.3
                            1.1
                                  0.2




                                           1.0
                                                 0.2




                                                       1.0
                                                             0.2




                                                                      1.0
                                                                            0.2




                                                                                        1.0
                                                                                              0.2
                  0.0                                                                                  60.0
                          4QFY11         1QFY12        2QFY12         3QFY12          4QFY12

                 Source: Company, Angel Research


                 Investment arguments
                 Strong capital adequacy, expanding network to sustain traction
                 in credit market share and CASA deposits, respectively

                 For FY2012, the bank’s capital adequacy stood strong at 16.5%, with tier-1 ratio
                 at a comfortable 11.6%. On the back of such strong CAR, we expect the bank to
                 increase its credit market share over FY2013–14. Accordingly, we expect the bank
                 to record a credit CAGR of ~23% over FY2013.

                 The bank’s strong and profitable growth over FY2005–11 was supported by
                 significant traction in CASA market share (from 3.3% in FY2005 to ~6.0% in
                 FY2011). The dominant transaction banking business lies at the core of the bank’s
                 strength in CASA deposits. Moreover, aided by the merger of CBoP, the bank’s
                 branch network moved up at a 30% CAGR during FY2006–11. The bank
                 increased its pace of network expansion in FY2012 with the addition of 558 new
                 branches (average annual addition of 200-300 branches) and 3,442 ATMs
                 (average annual addition of ~1,000 ATMs). The bank increased its presence in
                 over 400 cities during FY2012 (currently operating in 1,399 cities as compared to
                 996 as of FY2011). The bank’s increased geographic presence along with healthy
                 network expansion should aid in maintaining above system-average retail loan
                 growth for the bank on the asset side and CASA accretion on the liability side.




April 18, 2012                                                                                            6
                                                        HDFC Bank | 4QFY2012 Result Update




                 Comprehensive product portfolio,                   effective     cross-selling       to
                 sustain traction in fee income

                 Apart from traditional CEB and forex income, the bank earns substantial fee
                 income from transaction banking, cards and third-party distribution, among
                 others. Overall, the bank’s core fee income posted a 27.8% CAGR over
                 FY2008–12 and stands at around 1.7% of ATA for FY2012, one of the best in the
                 sector – offering another significant competitive advantage to the bank. The bank’s
                 major proportion of fee income (~85%) comes from the retail asset side. Strong
                 growth in retail loan book over the past year (33.7% yoy) coupled with potential
                 fee income revenue from new branch additions (though with a lag) should help the
                 bank maintain its fee income to average assets at 1.7% over FY2013-14 as well.

                 Healthy asset quality
                 The bank has been able to improve its asset quality consistently, as reflected in
                 slippages, which declined from 5.2% in FY2009 to 1.0% during FY2012.
                 Provisions to average assets also declined from 1.2% in FY2009 to 0.5% in
                 FY2012. HDFC Bank has been able to sustain a healthy asset quality even in a
                 challenging macro environment; and with interest rates expected to have a
                 downward trajectory over the next two years, cyclical losses on the retail loan book
                 should start dipping, leading to further reduction in provisioning expenses (as a %
                 of ATA) during FY2013-14.

                 Valuations leave limited upside

                 We believe HDFC Bank is among the most competitive banks in the sector, with an
                 A-list management at the helm of affairs, which has one of the best track records
                 in the sector. We believe HDFC Bank is well positioned for high qualitative growth,
                 with strong CAR, healthy 20%+ branch expansion and robust asset quality. On the
                 back of this, in our view, the bank is set to further gain credit and CASA market
                 share.

                 HDFC Bank is currently trading at one-year forward 3.6x P/ABV (3.1x FY2014
                 ABV), which is higher than its median of 3.5x (over FY2005-12). We believe
                 current valuations largely factor in the positives, leaving only a limited upside in the
                 stock. We value the stock at 3.3x FY2014 P/ABV and, hence, recommend an
                 Accumulate rating with a target price of `567, giving an upside of 5.5%.




April 18, 2012                                                                                         7
                                                           HDFC Bank | 4QFY2012 Result Update



                 Exhibit 13: Key assumptions
                                                                    Earlier estimates      Revised estimates
                 Particulars (%)
                                                                   FY2013       FY2014     FY2013      FY2014
                 Credit growth                                       26.0           25.0     26.0            25.0
                 Deposit growth                                      28.0           25.0     28.0            25.0
                 CASA ratio                                          49.0           48.6     46.1            45.8
                 NIMs                                                  4.3           4.4       4.3            4.3
                 Other income growth                                 24.6           26.3     26.4            26.3
                 Growth in staff expenses                            23.8           25.0     23.8            25.0
                 Growth in other expenses                            23.8           25.0     24.8            25.0
                 Slippages                                             1.1           1.2       1.0            1.1
                 Coverage ratio                                      76.4           74.4     78.2            76.3
                 Source: Angel Research


                 Exhibit 14: Change in estimates
                                                       FY2013                         FY2014
                 Particulars (` cr)          Earlier      Revised             Earlier   Revised
                                                                  Var. (%)                      Var. (%)
                                          estimates     estimates          estimates estimates
                 NII                        15,102        15,203      0.7      18,989      19,108            0.6
                 Non-interest income         6,505         6,627      1.9       8,213       8,368            1.9
                 Operating income           21,606        21,830      1.0      27,203      27,477            1.0
                 Operating expenses         10,377        10,686      3.0      12,972      13,358            3.0
                 Pre-prov. profit           11,229        11,144     (0.8)     14,231      14,119         (0.8)
                 Provisions & cont.          1,399         1,314     (6.1)      1,893       1,781         (5.9)
                 PBT                         9,830         9,830      0.0      12,338      12,338         (0.0)
                 Prov. for taxes             3,189         3,189      0.0       4,003       4,003         (0.0)
                 PAT                         6,640         6,641      0.0       8,335       8,335         (0.0)
                 Source: Angel Research


                 Exhibit 15: Angel EPS forecast vs. consensus
                 Year (`)             Angel forecast               Bloomberg consensus               Var. (%)
                 FY2013E                    28.3                             27.8                      1.7
                 FY2014E                    35.5                             34.7                      2.3
                 Source: Bloomberg, Angel Research




April 18, 2012                                                                                                  8
                                                                                                                     HDFC Bank | 4QFY2012 Result Update



                 Exhibit 16: P/ABV band
                                    Price (`)                           2.00x                                     2.75x                                3.50x                             4.25x                                    5.00x

                 1,000


                   800


                   600


                   400


                   200


                     0




                                                 Feb-07




                                                                                                 Oct-08




                                                                                                                                                                                                          Feb-12
                                       Sep-06




                                                                                                                                                                 Nov-10



                                                                                                                                                                                          Sep-11
                                                                                   May-08




                                                                                                                                                       Jun-10
                                                                       Dec-07




                                                                                                                                                                                                                                    Dec-12
                                                                                                                                            Jan-10
                          Apr-06




                                                            Jul-07




                                                                                                                                Aug-09




                                                                                                                                                                             Apr-11




                                                                                                                                                                                                                       Jul-12
                                                                                                                  Mar-09
                 Source: Company, Angel Research


                 Exhibit 17: P/E band
                                                                     Price (`)                                     15x                        20x                    25x                         30x
                   900

                   750

                   600

                   450

                   300

                   150

                     0
                                                                                                                  Dec-07
                                                                                                Jul-07
                                                            Apr-06




                                                                                                                                                                                                                   Apr-11
                                                                                                                                                                Aug-09
                                                                                                                                           Oct-08

                                                                                                                                                      Mar-09
                                                                       Sep-06

                                                                                   Feb-07




                                                                                                                                                                                                                                  Sep-11

                                                                                                                                                                                                                                               Feb-12
                                                 Nov-05




                                                                                                                                                                                                     Nov-10
                                       Jun-05




                                                                                                                               May-08




                                                                                                                                                                                        Jun-10
                           Jan-05




                                                                                                                                                                           Jan-10




                 Source: Company, Angel Research


                 Exhibit 18: HDFC Bank – Premium/Discount to the Sensex (%)
                                                          Premium/Discount to Sensex                                                                     Avg. Historical Premium
                     70
                     60
                     50
                     40
                     30
                     20
                     10
                       0
                     (10)
                     (20)
                     (30)
                                        Jul-06




                                                                     Jul-07




                                                                                                         Jul-08




                                                                                                                                             Jul-09




                                                                                                                                                                          Jul-10




                                                                                                                                                                                                              Jul-11
                              Mar-06




                                                           Mar-07




                                                                                            Mar-08




                                                                                                                                  Mar-09




                                                                                                                                                                Mar-10




                                                                                                                                                                                                 Mar-11




                                                                                                                                                                                                                                      Mar-12
                                                 Nov-06




                                                                                Nov-07




                                                                                                                      Nov-08




                                                                                                                                                       Nov-09




                                                                                                                                                                                      Nov-10




                                                                                                                                                                                                                         Nov-11




                 Source: Bloomberg, Angel Research




April 18, 2012                                                                                                                                                                                                                                          9
                                                                                                  HDFC Bank | 4QFY2012 Result Update



Exhibit 19: Recommendation summary
                                 CMP     Tgt. price    Upside    FY2014E           FY2014E      FY2014E        FY2012-14E       FY2014E     FY2014E
Company       Reco.
                                  (`)            (`)      (%)    P/ABV (x)     Tgt P/ABV (x)      P/E (x)     EPS CAGR (%)       RoA (%)     RoE (%)
AxisBk        Buy              1,197         1,550      29.5           1.7               2.2          8.8              16.5           1.5      20.4
FedBk         Neutral            432              -         -          1.0                 -          7.5              13.0           1.3      14.5
HDFCBk        Accumulate         537           567        5.5          3.1               3.3        15.1               27.0           1.7      22.1
ICICIBk*      Buy                873         1,135      30.0           1.5               1.9        11.2               19.8           1.4      16.2
SIB           Neutral              25             -         -          1.1                 -          6.4                6.7          0.9      17.7
YesBk         Buy                369           477      29.1           1.9               2.4          8.8              22.7           1.5      23.3
AllBk         Accumulate         191           205        7.7          0.7               0.8          4.7              (2.1)          1.0      17.0
AndhBk        Neutral            125              -         -          0.7                 -          4.6                6.5          1.0      16.7
BOB           Buy                791           943      19.2           0.9               1.1          5.2              12.2           1.1      19.2
BOI           Neutral            377              -         -          1.0                 -          5.8              21.3           0.8      16.5
BOM           Accumulate           54           62      13.9           0.7               0.8          4.0              26.8           0.9      17.5
CanBk         Accumulate         473           532      12.4           0.8               0.9          5.0              10.9           0.9      16.7
CentBk        Reduce             104            92     (10.7)          0.9               0.8          5.2              45.7           0.5      13.8
CorpBk        Buy                417           508      21.9           0.6               0.7          3.7                2.5          0.8      16.2
DenaBk        Buy                101           118      16.4           0.6               0.7          4.0                6.2          0.9      16.9
IDBI#         Neutral            109              -         -          0.7                 -          5.1              13.4           0.9      14.1
IndBk         Neutral            231              -         -          0.8                 -          4.7                5.4          1.2      18.2
IOB           Accumulate           97          104        7.0          0.6               0.7          4.6              29.9           0.6      13.9
J&KBk         Neutral            920              -         -          0.8                 -          4.7                8.8          1.4      18.6
OBC           Accumulate         265           296      11.7           0.6               0.7          4.4              17.1           0.8      13.6
PNB           Buy                924         1,138      23.2           0.9               1.1          5.2                8.8          1.1      18.5
SBI*          Accumulate       2,265         2,593      14.5           1.4               1.6          8.4              23.6           1.0      19.1
SynBk         Accumulate         113           128      13.0           0.7               0.8          4.1                8.7          0.8      17.2
UcoBk         Reduce               86           79      (8.4)          0.8               0.8          4.6                7.7          0.7      16.2
UnionBk       Buy                228           266      16.8           0.7               0.9          4.6              27.2           0.8      17.4
UtdBk         Buy                  75           87      16.3           0.6               0.7          3.5              11.4           0.7      16.0
VijBk         Reduce               62           55     (11.8)          0.8               0.7          5.4              14.2           0.5      13.2
Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF




April 18, 2012                                                                                                                                   10
                                                                  HDFC Bank | 4QFY2012 Result Update




                 Income statement
                 Y/E March (` cr)               FY08         FY09     FY10     FY11       FY12     FY13E     FY14E
                 Net Interest Income           5,228        7,421    8,386    10,543    12,297    15,203    19,108
                 - YoY Growth (%)               40.9         42.0     13.0      25.7       16.6     23.6       25.7
                 Other Income                  2,205        3,471    3,983     4,335     5,244     6,627     8,368
                 - YoY Growth (%)               46.0         57.4     14.8       8.8       21.0     26.4       26.3
                 Operating Income              7,433 10,892 12,370            14,878    17,540    21,830    27,477
                 - YoY Growth (%)               42.4         46.5     13.6      20.3       17.9     24.5       25.9
                 Operating Expenses            3,746        5,685    5,940     7,153     8,590    10,686    13,358
                 - YoY Growth (%)               54.7         51.8      4.5      20.4       20.1     24.4       25.0
                 Pre - Provision Profit        3,688        5,207    6,430     7,725     8,950    11,144    14,119
                 - YoY Growth (%)               31.7         41.2     23.5      20.2       15.9     24.5       26.7
                 Prov. & Cont.                 1,407        1,908    2,141     1,907     1,437     1,314     1,781
                 - YoY Growth (%)               21.2         35.6     12.2     (10.9)    (24.6)     (8.6)      35.5
                 Profit Before Tax             2,281        3,299    4,289     5,819     7,513     9,830    12,338
                 - YoY Growth (%)               39.2         44.6     30.0      35.7       29.1     30.8       25.5
                 Prov. for Taxation                 691     1,054    1,340     1,892     2,346     3,189     4,003
                 - as a % of PBT                30.3         32.0     31.3      32.5       31.2     32.4       32.4
                 PAT                           1,590        2,245    2,949     3,926     5,167     6,641     8,335
                 - YoY Growth (%)               39.3         41.2     31.3      33.2       31.6     28.5       25.5



                 Balance sheet
                 Y/E March (` cr)           FY08          FY09      FY10      FY11       FY12     FY13E      FY14E
                 Share Capital               354           425       458       465        470       470        470
                 Reserves & Surplus        11,143     14,627       21,065    24,914     28,908    34,047     40,471
                 Deposits                 100,769 142,812 167,404 208,586 246,706 315,784                   394,730
                 - Growth (%)                47.5          41.7      17.2      24.6       18.3      28.0       25.0
                 Borrowings                 4,595         2,686     7,012     7,447     11,509    14,562     18,154
                 Tier 2 Capital             3,449         6,478     5,904     6,947     12,337    14,311     19,320
                 Other Liab. & Prov.       12,867     16,243       20,616    28,993     37,979    48,372     59,845
                 Total Liabilities        133,177 183,271 222,459 277,353 337,910 427,547                   532,990
                 Cash Balances             12,553     13,527       15,483    25,101     14,991    15,789     15,789
                 Bank Balances              2,225         3,979    14,459     4,568      5,947     7,524      9,380
                 Investments               49,394     58,818       58,608    70,929     97,483 127,640      162,289
                 Advances                  63,427     98,883 125,831 159,983 195,420 246,229                307,787
                 - Growth (%)                35.1          55.9      27.3      27.1       22.2      26.0       25.0
                 Fixed Assets               1,175         1,707     2,123     2,171      2,347     2,881      3,483
                 Other Assets               4,403         6,357     5,955    14,601     21,722    27,484     34,262
                 Total Assets             133,177 183,271 222,459 277,353 337,910 427,547                   532,990
                 - Growth (%)                46.0          37.6      21.4      24.7       21.8      26.5       24.7




April 18, 2012                                                                                                  11
                                                HDFC Bank | 4QFY2012 Result Update



                 Ratio analysis
                 Y/E March                      FY08   FY09   FY10   FY11    FY12 FY13E FY14E
                 Profitability ratios (%)
                 NIMs                            4.9    4.9    4.3    4.4     4.3     4.3    4.3
                 Cost to Income Ratio           50.4   52.2   48.0   48.1    49.0    49.0   48.6
                 RoA                             1.4    1.4    1.5    1.6     1.7     1.7    1.7
                 RoE                            17.7   16.9   16.1   16.7    18.9    20.8   22.1
                 B/S ratios (%)
                 CASA Ratio                     54.5   44.4   52.0   52.7    48.4    46.1   45.8
                 Credit/Deposit Ratio           62.9   69.2   75.2   76.7    79.2    78.0   78.0
                 CAR                            13.6   15.1   17.4   16.2    16.2    15.1   15.0
                 - Tier I                       10.3   10.2   13.3   12.2    11.1    10.3    9.9
                 Asset Quality (%)
                 Gross NPAs                      1.4    2.0    1.4    1.0     1.0     1.1    1.2
                 Net NPAs                        0.5    0.6    0.3    0.2     0.2     0.2    0.3
                 Slippages                       2.5    5.3    2.6    1.1     1.0     1.0    1.1
                 Loan Loss Prov. /Avg. Assets    0.9    1.0    1.0    0.3     0.3     0.3    0.3
                 Provision Coverage             67.1   68.4   78.4   82.5    82.4    78.2   76.3
                 Per Share Data (`)
                 EPS                             9.0   10.6   12.9   16.9    22.0    28.3   35.5
                 ABVPS (75% cover.)             64.5   70.2   94.0 109.1 125.1 147.0 174.4
                 DPS                             1.7    1.7    2.4    3.3     4.3     5.5    7.0
                 Valuation Ratios
                 PER (x)                        59.8   50.9   41.7   31.8    24.4    19.0   15.1
                 P/ABVPS (x)                     8.3    7.7    5.7    4.9     4.3     3.7    3.1
                 Dividend Yield                  0.3    0.3    0.4    0.6     0.8     1.0    1.3
                 DuPont Analysis
                 NII                             4.7    4.7    4.1    4.2     4.0     4.0    4.0
                 (-) Prov. Exp.                  1.3    1.2    1.1    0.8     0.5     0.3    0.4
                 Adj. NII                        3.4    3.5    3.1    3.5     3.5     3.6    3.6
                 Treasury                        0.1    0.3    0.2   (0.0)   (0.1)    0.0    0.0
                 Int. Sens. Inc.                 3.6    3.7    3.3    3.4     3.5     3.6    3.6
                 Other Inc.                      1.8    1.9    1.8    1.8     1.8     1.7    1.7
                 Op. Inc.                        5.4    5.7    5.0    5.2     5.2     5.4    5.4
                 Opex                            3.3    3.6    2.9    2.9     2.8     2.8    2.8
                 PBT                             2.0    2.1    2.1    2.3     2.4     2.6    2.6
                 Taxes                           0.6    0.7    0.7    0.8     0.8     0.8    0.8
                 RoA                             1.4    1.4    1.5    1.6     1.7     1.7    1.7
                 Leverage                       12.5   11.9   11.1   10.7    11.2    12.0   12.7
                 RoE                            17.7   16.9   16.1   16.7    18.9    20.8   22.1




April 18, 2012                                                                               12
                                                                                            HDFC Bank | 4QFY2012 Result Update




  Research Team Tel: 022 - 39357800                   E-mail: research@angelbroking.com                    Website: www.angelbroking.com

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  Disclosure of Interest Statement                                               HDFC Bank
  1. Analyst ownership of the stock                                                 No
  2. Angel and its Group companies ownership of the stock                           No
  3. Angel and its Group companies' Directors ownership of the stock                No
  4. Broking relationship with company covered                                      No


  Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors


  Ratings (Returns):              Buy (> 15%)                            Accumulate (5% to 15%)                     Neutral (-5 to 5%)
                                  Reduce (-5% to 15%)                    Sell (< -15%)

April 18, 2012                                                                                                                             13

				
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