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HDFC Bank Ltd (NYSE:HDB)
E10
\$1.32 (As of Dec. 2016)

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. 2016 was \$0.664. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$1.32 for the trailing ten years ended in Dec. 2016.

As of today, HDFC Bank Ltd's current stock price is \$79.61. HDFC Bank Ltd's E10 for the quarter that ended in Dec. 2016 was \$1.32. HDFC Bank Ltd's Shiller P/E Ratio of today is 60.31.

During the past 13 years, the highest Shiller P/E Ratio of HDFC Bank Ltd was 67.99. The lowest was 44.83. And the median was 53.98.

Definition

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use todays price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Lets use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned \$1 a share in 2001, then the 2001s equivalent earnings in 2010 is \$1.4 a share. If Wal-Mart earns \$1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is \$1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, HDFC Bank Ltd's adjusted earnings per share data for the three months ended in Dec. 2016 was:

 Adj_EPS = Earnigns per Share / CPI of Dec. 2016 (Change) * Current CPI (Dec. 2016) = 0.663665913529 / 241.432 * 241.432 = 0.664

Current CPI (Dec. 2016) = 241.432.

HDFC Bank Ltd Quarterly Data

 201412 201503 201506 201509 201512 201603 201606 201609 201612 201703 per share eps 0.545 0.487 0.499 0.512 0.591 0.508 0.562 0.518 0.664 0.825 CPI 234.812 236.119 238.638 237.945 236.525 238.132 241.018 241.428 241.432 243.985 Adj_EPS 0.561 0.498 0.504 0.52 0.603 0.515 0.563 0.518 0.664 0.817 201206 201209 201212 201303 201306 201309 201312 201403 201406 201409 per share eps 0.322 0.359 0.428 0.309 0.396 0.387 0.471 0.361 0.532 0.483 CPI 229.478 231.407 229.601 232.773 233.504 234.149 233.049 236.293 238.343 238.031 Adj_EPS 0.339 0.374 0.45 0.321 0.409 0.399 0.488 0.369 0.539 0.49 200912 201003 201006 201009 201012 201103 201106 201109 201112 201203 per share eps 0.237 0.092 0.225 0.255 0.306 0.371 0.308 0.321 0.349 0.317 CPI 215.949 217.631 217.965 218.439 219.179 223.467 225.722 226.889 225.672 229.392 Adj_EPS 0.265 0.103 0.249 0.282 0.337 0.401 0.329 0.341 0.374 0.334 200706 200709 200712 200803 200806 200809 200812 200903 200906 200909 per share eps 0.114 0.113 0.172 0.058 0.152 0.066 0.181 0.065 0.177 0.098 CPI 208.352 208.49 210.036 213.528 218.815 218.783 210.228 212.709 215.693 215.969 Adj_EPS 0.132 0.13 0.198 0.065 0.167 0.073 0.207 0.074 0.199 0.109

Add all the adjusted EPS together and divide 10 will get our e10.

Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller P/E Ratio can seem to be too high even the actual P/E is low.

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 of today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 79.61 / 1.32 = 60.31

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

During the past 13 years, the highest Shiller P/E Ratio of HDFC Bank Ltd was 67.99. The lowest was 44.83. And the median was 53.98.

Be Aware

Shiller P/E Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.

Related Terms

Shiller P/E Ratio

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

HDFC Bank Ltd Annual Data

 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 e10 0.00 0.00 0.00 0.52 0.61 0.70 0.81 1.06 1.27 0.00

HDFC Bank Ltd Quarterly Data

 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 e10 0.92 1.06 1.10 1.16 1.21 1.27 1.34 1.40 1.32 0.00
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