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As of today, HDFC Bank Ltd's current share price is $39.81. HDFC Bank Ltd's E10 for the quarter that ended in Dec. 2013 was $0.99. HDFC Bank Ltd's Shiller P/E Ratio for today is 39.90.
During the past 13 years, HDFC Bank Ltd's highest Shiller P/E Ratio was 57.81. The lowest was 17.35. And the median was 40.56.
E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.
HDFC Bank Ltd's adjusted earnings per share data for the three months ended in Dec. 2013 was $0.476. Since most companies do not have as long as 10 years history, here we use 6 years to calculate. Add all the adjusted EPS for the past 6 years together and divide 6 will get our E10, which is $0.99 for the trailing six years ended in Dec. 2013.
For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.
The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.
HDFC Bank Ltd's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
HDFC Bank Ltd's E10 for the fiscal year that ended in Mar13 is calculated as:
For example, HDFC Bank Ltd's adjusted earnings per share data for the three months ended in Dec. 2013 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Dec. 2013||*||CPI of Current|
Since most companies do not have as long as 10 years history, here we use 6 years to calculate:
Current CPI = 236.511.
HDFC Bank Ltd Quarterly Data
|per share eps||0.311||0.359||0.309||0.032||0.034||0.432||0.310||0.040||0.660||0.469|
|per share eps||0.000||0.175||0.101||0.241||0.100||0.223||0.264||0.304||0.376||0.311|
|per share eps||0.056||0.152||0.059||0.180|
Add all the adjusted EPS together and divide 6 will get our E10.
Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.
If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.
Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.
The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a companys business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.
HDFC Bank Ltd Annual Data
HDFC Bank Ltd Quarterly Data