4QFY2012 Result Update | Banking

April 18, 2012

HDFC Bank
Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 4QFY12

3,388 2,413 1,453

ACCUMULATE
CMP Target Price
% chg (qoq)
8.7 1.5 1.6

`537 `567
12 months

3QFY12
3,116 2,378 1,430

4QFY11
2,839 2,097 1,115

% chg (yoy)
19.3 15.1 30.4

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 125,994 1.0 540/400 221,785 2 17,392 5,300 HDBK.BO HDFCB@IN

Source: Company, Angel Research

For 4QFY2012, HDFC Bank reported healthy 30.4% yoy growth in its net profit to `1,453cr, in-line with ours as well as streets estimates. Improved margins on the back of higher CASA floats and traction in retail loan book along with strong network expansion during the quarter were the key highlights of the result. We maintain our Accumulate recommendation on the stock. Another quarter of steady performance: HDFC Banks 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 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 (up 6.8% qoq) and run-down of some of the short-term low-yielding corporate loans led to higher margins (4.2%) for the bank during 4QFY2012. 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 maintained its strong assetquality 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 (compared to average annual addition of 200-300 branches). The strong increase in branch network coupled with processing fees on issuance of tax-free 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) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 23.2 10.9 47.4 18.5

Abs. (%) Sensex HDFC Bank

3m 5.6 14.9

1yr (9.0) 14.3

3yr 57.8 151.3

FY2011
10,543 25.7 3,926 33.2 4.4 16.9 31.8 4.9 1.6 16.7

FY2012
12,297 16.6 5,167 31.6 4.3 22.0 24.4 4.3 1.7 18.9

FY2013E
15,203 23.6 6,641 28.5 4.3 28.3 19.0 3.7 1.7 20.8

FY2014E
19,108 25.7 8,335 25.5 4.3 35.5 15.1 3.1 1.7 22.1

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

HDFC Bank | 4QFY2012 Result Update

Exhibit 1: 4QFY2012 performance

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee & commission income - Treasury income - Forex & derivative income Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 7,388 5,610 1,728 45 5 4,000 3,388 1,492 1,563 1,237 (72) 325 1 4,880 2,467 928 1,539 2,413 298 2,115 662 1,453 7,203 5,417 1,748 35 3 4,087 3,116 1,420 1,502 1,128 (82) 366 9 4,536 2,158 867 1,291 2,378 329 2,049 619 1,430 2.6 3.6 (1.1) 29.4 67.6 (2.1) 8.7 5.1 4.1 9.7 (12.6) (11.1) (88.6) 7.6 14.3 7.0 19.2 1.5 (9.4) 3.2 6.9 1.6 5,469 4,151 1,297 19 2 2,629 2,839 1,256 1,247 1,001 9 245 1 4,095 1,998 733 1,265 2,097 431 1,666 551 1,115 35.1 35.2 33.3 140.2 108.8 52.1 19.3 18.8 25.4 23.7 (931.4) 32.5 (15.5) 19.2 23.5 26.6 21.6 15.1 (30.8) 27.0 20.2 30.4

Exhibit 2: 4QFY2012 Actual vs. estimates

Particulars (` cr) Net interest income Other income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 3,388 1,492 4,880 2,467 2,413 298 2,115 662 1,453

Estimates 3,257 1,471 4,727 2,259 2,468 337 2,131 680 1,451

Var. (%) 4.0 1.5 3.2 9.2 (2.2) (11.5) (0.7) (2.7) 0.1

April 18, 2012

HDFC Bank | 4QFY2012 Result Update

Exhibit 3: 4QFY2012 performance analysis

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%)
Source: Company, Angel Research

4QFY12 3QFY12 % chg (qoq) 4QFY11 % chg (yoy) 195,420 194,303 246,706 232,508 79.2 45,408 73,998 48.4 16.5 11.6 4.2 50.6 1,999 1.0 352 0.2 82.4 83.6 40,576 70,330 47.7 16.3 11.2 4.1 47.6 2,021 1.0 398 0.2 80.3 0.6 159,983 6.1 208,586 (436)bp 11.9 5.2 70bp 20bp 40bp 10bp 298bp (1.0) (1)bp (11.5) 0bp 207bp 76.7 46,460 63,448 52.7 16.2 12.2 4.4 48.8 1,694 1.1 296 0.2 82.5 22.2 18.3 251bp (2.3) 16.6 8.6 (429)bp 30bp (60)bp (20)bp 175bp 18.0 (3)bp 18.9 0bp (13)bp

119,406 110,906

7.7 109,908

Balance sheet growth above industry; NIM expands sequentially

HDFC Banks 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

HDFC Bank | 4QFY2012 Result Update

Exhibit 4: Healthy growth in retail loans in spite of high interest rates

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

107,126 100,347

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 banks 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

(%) 40.0 30.0 20.0 10.0 Advances
Source: Company, Angel Research

Exhibit 6: Reported NIM remains above 4%

3QFY12 4QFY12
(%)

4QFY11

1QFY12

2QFY12

4.3 4.2 4.1 4.2 4.2 4.1 4.1 4.2

27.1

20.0

20.0

22.1

22.2

24.6

15.4

18.1

21.0

18.3

4.0 3.9

Deposits

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

Source: Company, Angel Research

April 18, 2012

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 (%) 50.0 40.0 42.9

55.0

52.7 49.1 47.3 48.4

50.0

47.7

30.0 20.0 10.0 -

37.5

16.6 8.6

45.0

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

3QFY12 2,544

40.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 9: Healthy capital adequacy

Tier-I CAR (%) 20.0 15.0 10.0 5.0 4QFY11 1QFY12 2QFY12 3QFY12 4QFY12 12.2 11.4 11.4 11.2 11.6 16.2 4.0 16.9 5.5 Tier-II CAR (%) 16.5 5.1 16.3 5.1 16.5 4.9

Exhibit 10: 343 branches added during 4QFY2012

Branches 3,000 2,500 5,471 2,000 5,998 6,520 7,110 ATMs (RHS) 8,913 9,500 7,500 5,500

1,986

2,111

2,150

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

Source: Company, Angel Research

2,201

1,500

3,500 1,500

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 banks 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) Fees & Commission Treasury Income Forex Income & Others Other Other income Other income excl. treasury
Source: Company, Angel Research

4QFY12 1,237 (72) 325 1 1,492 1,563

3QFY12 1,128 (82) 366 9 1,420 1,502

% chg (qoq) 9.7 NA (11.1) (88.6) 5.1 4.1

4QFY11 1,001 9 245 1 1,256 1,247

% chg (yoy) 23.7 NA 32.5 (18.3) 18.8 25.4

April 18, 2012

4QFY12

HDFC Bank | 4QFY2012 Result Update

Asset quality remains largely stable

The bank maintained its strong asset quality track record during 4QFY2012 as well. The banks 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 (%) 1.2 82.5 0.9 82.6 81.3 80.3 82.4 80.0 0.6 70.0 0.3 Net NPAs (%) PCR (Calc, %, RHS) 90.0

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 banks 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 FY201314. Accordingly, we expect the bank to record a credit CAGR of ~23% over FY2013. The banks strong and profitable growth over FY200511 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 banks strength in CASA deposits. Moreover, aided by the merger of CBoP, the banks branch network moved up at a 30% CAGR during FY200611. 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 banks 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

HDFC Bank | 4QFY2012 Result Update

Comprehensive product portfolio, sustain traction in fee income

effective

cross-selling

to

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 banks core fee income posted a 27.8% CAGR over FY200812 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 banks 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

HDFC Bank | 4QFY2012 Result Update

Exhibit 13: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Angel Research

Earlier estimates FY2013 26.0 28.0 49.0 4.3 24.6 23.8 23.8 1.1 76.4 FY2014 25.0 25.0 48.6 4.4 26.3 25.0 25.0 1.2 74.4

Revised estimates FY2013 26.0 28.0 46.1 4.3 26.4 23.8 24.8 1.0 78.2 FY2014 25.0 25.0 45.8 4.3 26.3 25.0 25.0 1.1 76.3

Exhibit 14: Change in estimates

FY2013 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

Earlier estimates
15,102 6,505 21,606 10,377 11,229 1,399 9,830 3,189 6,640

Revised Earlier Var. (%) estimates estimates

15,203 6,627 21,830 10,686 11,144 1,314 9,830 3,189 6,641 0.7 1.9 1.0 3.0 (0.8) (6.1) 0.0 0.0 0.0 18,989 8,213 27,203 12,972 14,231 1,893 12,338 4,003 8,335

FY2014 Revised Var. (%) estimates

19,108 8,368 27,477 13,358 14,119 1,781 12,338 4,003 8,335 0.6 1.9 1.0 3.0 (0.8) (5.9) (0.0) (0.0) (0.0)

Exhibit 15: Angel EPS forecast vs. consensus

Year (`) FY2013E FY2014E Angel forecast 28.3 35.5 Bloomberg consensus 27.8 34.7 Var. (%) 1.7 2.3

Source: Bloomberg, Angel Research

April 18, 2012

HDFC Bank | 4QFY2012 Result Update

Exhibit 16: P/ABV band

Price (`) 1,000 800 600 400 200 0 2.00x 2.75x 3.50x 4.25x 5.00x

Feb-07

Nov-10

May-08

Dec-07

Feb-12

Sep-06

Oct-08

Sep-11

Jun-10

Aug-09

Source: Company, Angel Research

Exhibit 17: P/E band

Price (`) 900 750 600 450 300 150 0 15x 20x 25x 30x

Dec-07

Jul-07

Mar-09

Apr-06

Mar-09

Aug-09

Oct-08

Apr-11

Dec-12
Mar-12

Apr-06

Jan-10

Apr-11

Jul-07

Jul-12

Feb-07

Sep-06

Nov-05

May-08

Source: Company, Angel Research

Exhibit 18: HDFC Bank Premium/Discount to the Sensex (%)

Premium/Discount to Sensex 70 60 50 40 30 20 10 0 (10) (20) (30)
Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Mar-11 Jul-11 Nov-11

Avg. Historical Premium

Source: Bloomberg, Angel Research

April 18, 2012

Nov-10

Sep-11

Feb-12

Jun-05

Jan-05

Jan-10

Jun-10

HDFC Bank | 4QFY2012 Result Update

Exhibit 19: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Accumulate Buy Neutral Buy Accumulate Neutral Buy Neutral Accumulate Accumulate Reduce Buy Buy Neutral Neutral Accumulate Neutral Accumulate Buy Accumulate Accumulate Reduce Buy Buy Reduce CMP (`) 1,197 432 537 873 25 369 191 125 791 377 54 473 104 417 101 109 231 97 920 265 924 2,265 113 86 228 75 62 Tgt. price (`) 1,550 567 1,135 477 205 943 62 532 92 508 118 104 296 1,138 2,593 128 79 266 87 55 Upside (%) 29.5 5.5 30.0 29.1 7.7 19.2 13.9 12.4 (10.7) 21.9 16.4 7.0 11.7 23.2 14.5 13.0 (8.4) 16.8 16.3 (11.8) FY2013E P/ABV (x) 1.7 1.0 3.1 1.5 1.1 1.9 0.7 0.7 0.9 1.0 0.7 0.8 0.9 0.6 0.6 0.7 0.8 0.6 0.8 0.6 0.9 1.4 0.7 0.8 0.7 0.6 0.8 FY2013E Tgt P/ABV (x) 2.2 3.3 1.9 2.4 0.8 1.1 0.8 0.9 0.8 0.7 0.7 0.7 0.7 1.1 1.6 0.8 0.8 0.9 0.7 0.7 FY2013E P/E (x) 8.8 7.5 15.1 11.2 6.4 8.8 4.7 4.6 5.2 5.8 4.0 5.0 5.2 3.7 4.0 5.1 4.7 4.6 4.7 4.4 5.2 8.4 4.1 4.6 4.6 3.5 5.4 FY2011-13E EPS CAGR (%) 16.5 13.0 27.0 19.8 6.7 22.7 (2.1) 6.5 12.2 21.3 26.8 10.9 45.7 2.5 6.2 13.4 5.4 29.9 8.8 17.1 8.8 23.6 8.7 7.7 27.2 11.4 14.2 FY2013E RoA (%) 1.5 1.3 1.7 1.4 0.9 1.5 1.0 1.0 1.1 0.8 0.9 0.9 0.5 0.8 0.9 0.9 1.2 0.6 1.4 0.8 1.1 1.0 0.8 0.7 0.8 0.7 0.5 FY2013E RoE (%) 20.4 14.5 22.1 16.2 17.7 23.3 17.0 16.7 19.2 16.5 17.5 16.7 13.8 16.2 16.9 14.1 18.2 13.9 18.6 13.6 18.5 19.1 17.2 16.2 17.4 16.0 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) Net Interest Income - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY08 5,228 40.9 2,205 46.0 42.4 3,746 54.7 3,688 31.7 1,407 21.2 2,281 39.2 691 30.3 1,590 39.3 FY09 7,421 42.0 3,471 57.4 46.5 5,685 51.8 5,207 41.2 1,908 35.6 3,299 44.6 1,054 32.0 2,245 41.2 FY10 8,386 13.0 3,983 14.8 13.6 5,940 4.5 6,430 23.5 2,141 12.2 4,289 30.0 1,340 31.3 2,949 31.3 FY11 10,543 25.7 4,335 8.8 14,878 20.3 7,153 20.4 7,725 20.2 1,907 (10.9) 5,819 35.7 1,892 32.5 3,926 33.2 FY12 12,297 16.6 5,244 21.0 17,540 17.9 8,590 20.1 8,950 15.9 1,437 (24.6) 7,513 29.1 2,346 31.2 5,167 31.6 FY13E 15,203 23.6 6,627 26.4 21,830 24.5 10,686 24.4 11,144 24.5 1,314 (8.6) 9,830 30.8 3,189 32.4 6,641 28.5 FY14E 19,108 25.7 8,368 26.3 27,477 25.9 13,358 25.0 14,119 26.7 1,781 35.5 12,338 25.5 4,003 32.4 8,335 25.5

7,433 10,892 12,370

Balance sheet
Y/E March (` cr)
Share Capital Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%)

FY08
354 11,143 47.5 4,595 3,449 12,867

FY09
425 14,627 41.7 2,686 6,478 16,243

FY10
458 21,065 17.2 7,012 5,904 20,616

FY11
465 24,914 24.6 7,447 6,947 28,993

FY12
470 28,908 18.3 11,509 12,337 37,979

FY13E
470 34,047 28.0 14,562 14,311 48,372

FY14E
470 40,471 394,730 25.0 18,154 19,320 59,845 532,990 15,789 9,380 162,289 307,787 25.0 3,483 34,262 532,990 24.7

100,769 142,812 167,404 208,586 246,706 315,784

133,177 183,271 222,459 277,353 337,910 427,547 12,553 2,225 49,394 63,427 35.1 1,175 4,403 13,527 3,979 58,818 55.9 1,707 6,357 15,483 14,459 58,608 27.3 2,123 5,955 25,101 4,568 70,929 27.1 2,171 14,601 14,991 5,947 15,789 7,524

97,483 127,640 22.2 2,347 21,722 26.0 2,881 27,484

98,883 125,831 159,983 195,420 246,229

133,177 183,271 222,459 277,353 337,910 427,547 46.0 37.6 21.4 24.7 21.8 26.5

April 18, 2012

11

HDFC Bank | 4QFY2012 Result Update

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

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HDFC Bank | 4QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

HDFC Bank No No No No

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

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

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