HDFC BANK SHARE PRICE JUMPS 5% AS NEW CEO APPOINTED

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HDFC BANK SHARE PRICE JUMPS 5% AS NEW CEO APPOINTED

HDFC BANK share price



The giant private sector bank, the largest lender of personal, business, home loans, and credit card issuer HDFC Bank. Has appointed a new CEO Mr. Sashidhar Jagdishan, this made HDFC Bank share price to jump up to 5%.

HDFC bank was led by one of the finest CEO Mr. Aditya Puri for the last 26 years. India market was looking for, who will be after Aditya Puri to continue the legacy of the private sector bank.

Today, August 4th, 2020. RBI has declared a new CEO of HDFC bank and made the market in a positive note.

 

HDFC BANK:

·       

     Here we can look at a small recap of HDFC Bank. HDFC bank is one of the leaders in private sector banks in India. Located at Mumbai as headquarter, which was founded in August, 1994.

·       Aditya Puri, the first CEO of the bank took charge from September 1994 till the present.

·       Over the past 2.5 decades, the company has grown with the largest capitalization among Indian banks.

·       HDFC Bank share prices have grown up to 250 times under the leadership of Aditya Puri.

·       HDFC bank is with almost 1, 15,822 permanent employees. It has many subsidiaries under them like HDFC Securities, HDB Financial Services, HDFC Asset Management Company.

·       HDFC bank has been one of the best choices for all sorts of investors. It has delivered CAGR of 16% every year.

 

HDFC BANK SHARES – FUNDAMENTAL ANALYSIS:


·       VALUATIONS:

§  Market Capital – 575219.21 Crores.

§  Number of Share – 550.98 Crores

§  Book Value (Asset – Liabilities) – 322.27

§  Face Value – 1.00

§  EPS(TTM) – 51.92

§  P/E (HDFC BANK vs INDUSTRY) – 20.15 vs 24.11

§  Gross NPA – 1.36%

 

Last year (FY 18-19) the book value 564, which has come down to 322.68 in March 2020 annual report.

·       Gross NPA has moved higher from 1.26% in March 2020 to 1.36% due to extension EMI moratorium

·       In terms of bank stocks, P/B value, and Gross NPA is most important than P/E. The P/B should be between 1 and maximum can be 2.

·       The earnings and cash flows have come down over the Q1’2020 was due to EMI moratorium which is still continuing in Q2’2020.

·       As Finance Minister has an idea to extend the EMI moratorium, BANK NIFTY has fallen down continuously for three days from 22083 to 21069.

·       Almost 1000 points have come down in three days. If still EMI moratorium continues, banks NPA will increase and there will be decreased cash flow.

·       This will be impacting the balance sheet of the bank. Trading at more than Rs.850 per share will be more than 3 times the book value.

 

NEW CEO – HDFC BANK:


          In this current situation Aditya Puri, who is the current CEO has to retire and appoint the other leaders to head the company. Aditya Puri’s Successor Sashidhar Jagdishan was appointed as the new CEO of HDFC Bank by RBI approval.

          The total share market was in a situation to understand who will lead after Puri, as Puri has done a phenomenal job in bringing HDFC bank from starch.

          Once the announcement was shared, HDFC bank shares climbed to a stretch of 5% growth. This indicated that investors have shown a green flag in welcoming the new CEO.

          The whole investors and economists are looking after, will Sashidhar do as Puri. Kindly look at this article for more details. 

 

SASHIDHAR JAGDISHAN:


·       A well-known among the banking industry for his three decades. Heading various departments Finance, HR, Legal, Admin, CSR, Corporate communication.

·       Sashidhar joined HDFC on 1996 as Finance function manager, later became business head for finance around 1999.

·       In the year 2008, he became the chief financial officer. Currently holding the position of Additional Director and head of finance.

·       He has been the instrumental in managing various tragedies the bank faced in the last 26 years of journey.

·       Sashidhar was well recognized by the internal HDFC employees to be the next CEO.

Read: Who is Sashidhar Jagdishan, the new CEO of HDFC Bank 

 

CONCLUSION:


·       HDFC bank share prices climbed up to 5% as RBI appointed their New CEO

·       It was the most wanted the news to the market, as investors were looking for the next CEO of HDFC bank after Puri.

·       Investors have to be aware of the business process and current NPA trend before investing in HDFC bank shares.

·       The current financial year is looking bad due to the moratorium. If still continues, the earning and book value will come down.

·       Trading at a share price of Rs. 1000 for HDFC bank is highly valued and the reality on book value will be seen in the financial report of FY2020-21.

·       Don’t invest by news, invest by the business, and cash flows.

 

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