Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Yellowstone Equity

Creating Wealth through Alpha and Compounding

Equity Bottom-Up

<ul>
<li>While HDFC Bank ("HDFCB") is doing all the right things (distribution expansion, digital infrastructure revamp) from a long-term perspective, it also has near-term growth triggers led by its retail book.  </li>
<li>Excluding auto sector and two-wheeler loans, HDFCB's retail book grew 25% YoY in Q1FY23. As the supply chain disruptions recede, HDFCB's retail book growth could surprise on the upside.</li>
<li>
<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> is also making decent progress in its digitization upgrades which should further bolster the growth and productivity.</li>
</ul>

Brian Freitas

Pan-Asia Index Rebalances/Events/Delta One

Periscope Analytics

Event-Driven

<ul>
<li>Foreign selling has continued on <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> and <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> and foreign room on the proforma merged entity is 17.23%.</li>
<li>Higher than 15% foreign room will require passive MSCI trackers to buy 209m shares (US$4.05bn) of <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a> at the time of merger implementation.</li>
<li>If foreign selling continues and foreign room on the merged entity exceeds 20%, there will be buying from passive FTSE trackers as well.</li>
</ul>

Hemindra Hazari

Specialist in Indian banking and economic research

<ul>
<li>Issues with  HDFC Bank's Head-MSME statements which analysts and shareholders need to consider. </li>
<li>In MSME lending based on cash credit system verfication of stock statement is extremely important but there is no mention of it in his speech</li>
<li>HDFC Bank's MSME loans growing at a rapid pace but asset quality remain sound. It appears HDFC Bank's customers are very different as compared to the industry.</li>
</ul>

Nirmal Bang

External broker reports(aggregated public sources)

A Relationship Beyond Broking

<div><div><div><div><ul><li>Retail growth to pick up, supported by new product launches: Overall commentary was positive and mostly similar to the recent earning’s call wherein the management highlighted that growth is likely to pick up pace in the retail segment across product lines.</li></ul></div></div></div></div><div><div><div><div><ul><li>Corporate growth is expected to do well too: Even though retail loan book is expected to grow at a higher rate, corporate growth is expected to be healthy too.</li></ul><div><div><div><div><ul><li>CRB to clock 25-30% growth: In recent times, we have seen the CRB segment clocking growth rates of 25-30%, driven by expansion in semi-urban and rural areas.</li></ul></div></div></div></div></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

<ul>
<li>
<a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> and <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a>'s stock prices have dropped and underperformed their peers since the announcement of the merger in April. Foreign investors have been selling.</li>
<li>As of 13 May, foreign investors hold 68.56% of <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited (HDFC IN)</a> and 66.55% of <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a>, down from 72.16% and 70.08% respectively as of December 2021.</li>
<li>The merged entity currently has foreign room of 16% now and this could lead to large buying from passive MSCI and FTSE trackers at the time of merger implementation.</li>
</ul>

India

HDFC Bank Ltd. offers a wide range of services to the global corporate sector. The Bank provides corporate banking and custodial services and is active in the treasury and capital markets. HDFC also markets project advisory services and capital market products such as Global Deposit Receipts, Euro currency loans, and Euro currency bonds.

HDFC Bank - HDFCB IN

Description