Fact based stock research
HDFC Bank (NSEI:HDFCBANK)

INE040A01034

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

HDFC Bank stock research in summary

hdfcbank.com

ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), HDFC Bank (Diversified Banks, India) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of HDFC Bank are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives), and are riskily financed (Safety Rank of 49, which means above-average debt burdens) but show above-average growth (Growth Rank of 89). ...read more

RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on HDFC Bank's financial characteristics. As the company HDFC Bank shows low value with an Obermatt Value Rank of 11 (89% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 89% of comparable companies (Obermatt Growth Rank is 89). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 49 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for HDFC Bank, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	11
Growth Rank	89
Safety Rank	49
Combined Rank	45

Country	India
Industry	Diversified Banks
Index	BSE Sensex, Good Governace Growth Markets, CNX Nifty 50
Size class	XX-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: HDFC Bank

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	13	13	11
GROWTH
GROWTH	16	63	91	89
SAFETY
SAFETY	19	45	45	49
SENTIMENT
SENTIMENT	n/a	51	39	^new
360° VIEW
360° VIEW	n/a	31	45	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better HDFC Bank is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	13	13	11
GROWTH
GROWTH	16	63	91	89
SAFETY
SAFETY	19	45	45	49
COMBINED
COMBINED	6	19	49	45

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of HDFC Bank the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), HDFC Bank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for HDFC Bank. Price-to-Sales is 12 which means that the stock price compared with what market professionals expect for future profits is higher than 88% of comparable companies, indicating a low value concerning HDFC Bank's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 13, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of HDFC Bank. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 74% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on HDFC Bank's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for HDFC Bank? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as HDFC Bank? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. HDFC Bank may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	2	13	7	12
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	21	17	13
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	11	16	13
DIVIDEND YIELD
DIVIDEND YIELD	4	22	24	26
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	13	13	11

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of HDFC Bank; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2024, HDFC Bank shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for HDFC Bank. Sales Growth has a value of 70, which means that, currently, professionals expect the company to grow more than 70% of its competitors. The same is valid for Profit Growth with a value of 53 and for Capital Growth with 100. In addition, Stock Returns had an above-average rank value of 53, which means they have been higher than 53% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, HDFC Bank exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	20	84	89	70
PROFIT GROWTH
PROFIT GROWTH	45	37	83	53
CAPITAL GROWTH
CAPITAL GROWTH	n/a	74	75	100
STOCK RETURNS
STOCK RETURNS	30	39	37	53
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	16	63	91	89

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of HDFC Bank.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company HDFC Bank has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of HDFC Bank is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for HDFC Bank. Refinancing is at 50, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Liquidity is also good at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 44, which means the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), HDFC Bank has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and HDFC Bank could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with HDFC Bank and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	52	46	30	44
REFINANCING
REFINANCING	1	37	51	50
LIQUIDITY
LIQUIDITY	44	60	70	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	19	45	45	49

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of HDFC Bank and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	89	93	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	67	40	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	6	20	^new
MARKET PULSE
MARKET PULSE	n/a	46	14	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	51	39	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for HDFC Bank.
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