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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
HDFC Bank's Sloan Ratio for the quarter that ended in Mar. 2025 was 6.69%.
As of Mar. 2025, HDFC Bank has a Sloan Ratio of 6.69%, indicating the company is in the safe zone and there is no funny business with accruals.
HDFC Bank (NYSE:HDB) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2025, HDFC Bank has a Sloan Ratio of 6.69%, indicating the company is in the safe zone and there is no funny business with accruals.
HDFC Bank Sloan Ratio % Related Terms
HDFC Bank Sloan Ratio % Historical Data
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The historical data trend for HDFC Bank's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Banks - Regional subindustry, HDFC Bank's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
HDFC Bank Sloan Ratio % vs Banks Industry
For the Banks industry and Financial Services sector, HDFC Bank's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where HDFC Bank's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
HDFC Bank's Sloan Ratio for the fiscal year that ended in Mar. 2025 is calculated as
For company reported semi-annually, GuruFocus uses latest two semi-annual data as the TTM data.
HDFC Bank's Net Income for the trailing twelve months (TTM) ended in Mar. 2025 was 4040.517 (Sep. 2024 ) + 3871.288 (Mar. 2025 ) = $7,912 Mil.
HDFC Bank's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2025 was 8692.991 (Sep. 2024 ) + 5400.086 (Mar. 2025 ) = $14,093 Mil.
HDFC Bank's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2025 was -16311.132 (Sep. 2024 ) + -27153.173 (Mar. 2025 ) = $-43,464 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
HDFC Bank (HDB) has a Sloan Ratio % of 6.69% as of Mar. 2025. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on HDFC Bank and its competitors.
Is HDFC Bank's Sloan Ratio % too high?
HDFC Bank's current Sloan Ratio % is 6.69%. Overall, HDFC Bank has a GF Score™ of 73/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does HDFC Bank's Sloan Ratio % compare to PNC and USB?
HDFC Bank's Sloan Ratio % of 6.69% can be compared against companies in the Banks industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Banks company?
A good Sloan Ratio % depends on the Banks industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on HDFC Bank and its competitors. HDFC Bank's current Sloan Ratio % is 6.69%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is HDFC Bank stock overvalued right now?
Based on GuruFocus' analysis, HDFC Bank (HDB) is currently considered Modestly Undervalued. The stock's GF Value™ is $31.61, compared to a current price of $23.23 — trading 26.5% below its estimated fair value. The current Sloan Ratio % is 6.69%. HDFC Bank's overall GF Score™ is 73/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For HDFC Bank (HDB), the current Sloan Ratio % is 6.69% as of Mar. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is HDFC Bank (HDB) Overvalued in 2026?
Based on GuruFocus' analysis, HDFC Bank stock appears to be undervalued.
The current stock price of $23.23 is trading 26.5% below its estimated GF Value™ of $31.61.
GuruFocus considers HDFC Bank to be Modestly Undervalued.
Key valuation signals for HDB:
Sloan Ratio %: 6.69%
GF Value™: $31.61 vs. price of $23.23 (26.5% below fair value)
No single metric tells the full story. See the HDB stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
HDFC Bank Ltd is an Indian bank. It operates in the following segments: Treasury, Retail banking, Wholesale banking, and Other banking business. The maximum revenue for the company is generated from its Retail banking segment, which serves retail customers through its branch network and other channels. This segment raises customer deposits and provides loans and other services to customers using different product groups. Its other operations include providing wholesale banking services to corporates, government entities, and other enterprises, generating income from its treasury operations, and performing para-banking activities such as offering credit cards, debit cards, etc. Geographically, the company generates a majority of its revenue from its operations in India.
73GF Score
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Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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