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HDFC Bank Graham Number

: USD24.76 (As of Jun. 2020)
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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2020-09-24), the stock price of HDFC Bank is USD48.08. HDFC Bank's graham number for the quarter that ended in Jun. 2020 was USD24.76. Therefore, HDFC Bank's Price to Graham Number ratio for today is 1.94.

NYSE:HDB' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.44   Med: 2.19   Max: 2.88
Current: 1.7

1.44
2.88

During the past 13 years, the highest Price to Graham Number ratio of HDFC Bank was 2.88. The lowest was 1.44. And the median was 2.19.

NYSE:HDB's Price-to-Graham-Number is ranked lower than
96% of the 1271 Companies
in the Banks industry.

( Industry Median: 0.57 vs. NYSE:HDB: 1.70 )

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


HDFC Bank Graham Number 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 Annual Data
Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20
Graham Number Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12.83 15.39 18.61 22.08 24.46

HDFC Bank Quarterly Data
Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20
Graham Number 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 21.99 22.71 23.40 24.52 24.76

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.


HDFC Bank Graham Number Distribution

* The bar in red indicates where HDFC Bank's Graham Number falls into.



HDFC Bank Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

HDFC Bank's Graham Number for the fiscal year that ended in Mar. 2020 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*13.344*1.9919998068364)
=24.46

HDFC Bank's Graham Number for the quarter that ended in Jun. 2020 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*13.251*2.0565179100192)
=24.76

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


HDFC Bank  (NYSE:HDB) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

HDFC Bank's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Jun. 2020 )
=48.08/24.76
=1.94

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


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


HDFC Bank Graham Number Related Terms


HDFC Bank Graham Number Headlines

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