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HDFC Bank Ltd  (NYSE:HDB) E10: $1.51 (As of Jun. 2017)

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 Jun. 2017 was $0.698. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is $1.51 for the trailing ten years ended in Jun. 2017.

As of today, HDFC Bank Ltd's current stock price is $96.00. HDFC Bank Ltd's E10 for the quarter that ended in Jun. 2017 was $1.51. HDFC Bank Ltd's Shiller PE Ratio of today is 63.58.

During the past 13 years, the highest Shiller PE Ratio of HDFC Bank Ltd was 67.49. The lowest was 44.89. And the median was 54.18.


Historical Data

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

* Premium members only.

HDFC Bank Ltd Annual Data

Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.70 0.81 1.05 1.28 1.42

HDFC Bank Ltd Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
E10 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.34 1.40 1.30 1.42 1.51

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

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 Jun. 2017 was:

Adj_EPS= Earnings per Share (Diluted) /CPI of Jun. 2017 (Change)*Current CPI (Jun. 2017)
=0.698235171812/244.955*244.955
=0.698

Current CPI (Jun. 2017) = 244.955.

HDFC Bank Ltd Quarterly Data

per share eps CPI Adj_EPS
200709 0.113 208.490 0.132
200712 0.172 210.036 0.201
200803 0.058 213.528 0.066
200806 0.152 218.815 0.170
200809 0.066 218.783 0.074
200812 0.181 210.228 0.210
200903 0.065 212.709 0.075
200906 0.177 215.693 0.202
200909 0.098 215.969 0.111
200912 0.237 215.949 0.269
201003 0.092 217.631 0.104
201006 0.225 217.965 0.252
201009 0.255 218.439 0.286
201012 0.306 219.179 0.342
201103 0.371 223.467 0.406
201106 0.308 225.722 0.334
201109 0.321 226.889 0.346
201112 0.349 225.672 0.379
201203 0.317 229.392 0.338
201206 0.322 229.478 0.343
201209 0.359 231.407 0.380
201212 0.428 229.601 0.457
201303 0.309 232.773 0.325
201306 0.396 233.504 0.415
201309 0.387 234.149 0.404
201312 0.471 233.049 0.495
201403 0.361 236.293 0.375
201406 0.532 238.343 0.547
201409 0.483 238.031 0.497
201412 0.545 234.812 0.569
201503 0.487 236.119 0.506
201506 0.499 238.638 0.512
201509 0.512 237.945 0.527
201512 0.591 236.525 0.612
201603 0.508 238.132 0.523
201606 0.562 241.018 0.571
201609 0.518 241.428 0.525
201612 0.664 241.432 0.673
201703 0.614 243.801 0.617
201706 0.698 244.955 0.698

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 PE 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 PE Ratio=Share Price/E10
=96.00/1.51
=63.58

* 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 67.49. The lowest was 44.89. And the median was 54.18.


Be Aware

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


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