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Aditya Shah Profile picture
@AdityaD_Shah
Sep 18, 2023 • 13 tweets • 4 min read • Read on X
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HDFC Bank is continuing to underperform the Nifty!

Is the market worried about how the merged entity will play out?
Is this the 2019 ITC moment for HDFC Bank?

A thread🧵on what lies ahead for HDFC Bank?

Lets go👇 Image
What is happening?

HDFC Bank ever since the merger was announced has continued to underperform the index.

How is the business shaping up?

Lets find out👇 Image
Q1FY24 Results:-

Loan growth:-
🏦The loan growth was at 16%
🏦Missing retail loan growth came back to 18%
🏦Retail to Wholesale mix was at 47:53

Overall steady growth from on the loan side Image
Deposit Growth:-

🏦Overall system deposit growth was at 10-12%
🏦HDFC Bank grew its deposits at 19%
🏦New branches will certainly help the bank ramp up deposits

HDFC Bank is gaining market share in both loan and deposits Image
Cost of funds:-

🏦Cost of funds for the bank is now at 4%
🏦Yield is now at 8.1%
🏦NIMs have stabilized at 4.1% Image
NPAs:-
🏦Gross NPAs rose marginally sequentially
🏦Agri loans continue to be a pain point for the bank
🏦All other loans continue to show stable asset quality Image
Capital Adequacy:-

The bank has a strong Captial Adequacy 18.9%
TIER-1 capital is at 16.9%

With strong profitability, the bank has enough capital for near-term growth Image
So why is the market worried?

RoA and RoE could get hit in the near term as the HDFC book comes with a lower NIM.

This is one of the major concerns for the market.
NIM erosion below 4% is a key concern for the market. Image
Aggressive expansion of branches by HDFC Bank

The bank envisions to be 1-2 km of clients rather than the current 5-6 Km

This could inflate costs for the bank in the near term and needs to be monitored Image
Valuation:-

The bank now trades at historically low valuations of about 3x P/Bx

While this is not cheap,It is the lowest in the history of the bank Image
Conclusion:-

HDFC Bank's business is strong

Strong Loan Growth
Strong Deposit growth
Strong Asset quality
Strong capital

There is nothing to complain about per se

However near term merger concerns with ROE and NIM are something the market is worried about
Keep following me -@AdityaD_Shah as I write daily to make you aware around:
📈Personal Finance
📈Investing
📈Stock Analysis

Go to my profile and hit the bell icon🔔to always stay updated
Disclaimer:-
This is my study
Not an Investment Advise

Please consult your own investment advisor before investing.

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More from @AdityaD_Shah

Aditya Shah Profile picture
Sep 10
🚨Asset Allocation-Your friend in bad times

Should you invest all your money in equities/shares?
Should you diversify among asset classes?

S Naren called out for people to follow Asset allocation
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A thread🧵 on Asset Allocation and why it is your savior in bad times?

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What Is Asset Allocation?

When you save money, you have the below options for investing -

🏦Equities
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A proper asset allocation will help you with the right mix in each of the asset classes in a proportion that is commensurate to your risk profile Image
Let's understand these assets more!

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Sole purpose of Equities is to GENERATE wealth

Ownership of business

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Only asset class that can compound in double digits Image
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Aug 21
🚨What to do with your LIC policies?

Most households have traditional Life insurance policies with an "Assured Sum of money" from LIC and other insurers

Most do not know what to do with these policies now

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A Life Insurance policy provides financial security to the family of the insured, in case of their death during the policy period, and in some cases a maturity benefit to the insured person, after a set period of time.
What is life insurance?

A Life Insurance policy provides financial security to the family of the insured, in case of their death during the policy period, and in some cases a maturity benefit to the insured person, after a set period of time. Image
Read 16 tweets
Aditya Shah Profile picture
Jul 20
ICICI Bank-The clear Market leader!

Both HDFC and ICICI reported numbers yesterday
How does ICICI Bank stack up against HDFC Bank?

Is ICICI Bank way ahead of HDFC Bank?🤔🤔🤔

A short thread🧵analyzing each and every aspect of both results.

Lets go👇 Image
Loan+Deposit growth:-

ICICI Bank
🏦Total deposits grew 12%
🏦Loans grew at about 12%

HDFC Bank
🏦Deposits grew at 16,2%
🏦Loan grew at just 6%

Both Banks are gaining market share in both deposit and loan portfolios
While ICICI marches on,
HDFC Bank has slowed down its loan growth due to meer issues and bringing down the LDR
Loan portfolio growth:-

Bulk of ICICI's growth came from the 6.9% retail growth.

The corporate loan growth slipped to only 7.5%

HDFC Bank had a retail growth of 8%
The corporate loan growth slipped to only 1.7% Image
Image
Read 12 tweets
Aditya Shah Profile picture
Jun 30
Tax Planning is very important to optimize tax outgo!

Hindu Undivided Family(HUF) is a good option that is available for all married persons

What is HUF? How to create it?

A thread🧵on HUF,how to create HUF and its benefits?

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An HUF, under the Hindu law, is a family consisting of lineal descendants from a common ancestor. It includes their wives and unmarried children.
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HUF is a separate entity for the purpose of assessment under the Act.
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🚨How to buy health insurance- A checklist

Health insurance policies come with 100s of variations & are very complicated🤯🤯

Which conditions should u keep in mind before buying a health insurance policy?🤔🤔

A thread🧵 on a comprehensive checklist of things you should check before buying a health insurance policy

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In simple words, you pay a premium to an insurance company.
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Almost everyone should have personal health insurance Image
Which health insurance policy to buy?

Health insurance policies come with 100s of variations such as:-

🩺Some have co-pay
🩺Some have lower premium
🩺Some have higher new claim bonus
🩺Some have caps on various things

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Aditya Shah Profile picture
May 30
🚨 Suzlon- Is the turnaround finally completed?

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Suzlon is reported 67% revenue growth in FY25
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Is the wind energy and Suzlon's business on a massive turnaround?🤔🤔

A thread🧵on the business of Suzlon and what lies ahead?

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