HDFC Bank (HDFC) is an India-based banking company catering to business segments like retail and wholesale banking, and treasury operations.
HDFC Bank had maintained an earnings growth of around 30% over the last 3 years. The bankâ¿¿s balance sheet growth was about 30% during the last five years. However, asset growth could taper to about 25% on a higher base over the next couple of years. An improvement in return ratios and sustaining net profit growth at 28%-32% would be feasible, according to analysts. The bank has successfully increased the proportion of corporate segment as well as the share of non-secured retail, which could be margin dilutive. Besides, HDFC is focusing on the rural segment, expecting higher returns on assets in the long term. High capitalization and improved lending practices have helped the bank to curtail bad loans. Going ahead, as a percentage of loans, bad loans would stand at 1.3%-1.4%, say analysts. The stock is trading at 3.7 times its 2011-12 estimated book.