FY 2013/14

Income Statement (in INR Millions)

INCOME :           
Interest Earned 69,461
Interest/discount on advances/bills 50,111 Int/Advances
Interest on balances with RBI and other interbank funds 524 Int/Cash & balance with RBI
Income on investments 17,768 Income on Invt/Invt in India
Others 1,058

Other Income 6,938

Commission, exchange, and brokerage 3,338 C,E&B/Advances
Profit/(loss) on sale of investments (net) 1,562
Profit on sale of fixed assets 13
Foreign exchange gains 1,251
Dividend received 147
Provisions written back 415
Miscellaneous income 212

Total Income 76,399

EXPENDITURE
Interest Expended 47,175
Interest on deposits 42,095 Int on deposits/Deposits
Interest on RBI/interbank borrowings 1,121 Int on RBI/Interbank Borrowing/Borrowing
Other interest 3,959

Net Interest Income 29,225

Operating Expenses and Administrative Expenses 14,421 Op&Admn Exp/Total Income

Provisions and Contingencies 2,684

Provision for investments 1,116
Others provisions 1,568 Other provisions/Advances

Profit Before Tax 12,120

Taxes 3,731

Face Value 2
Profit After Tax 8,389
Number of shares outstanding 855
Equity Dividend % 100
EPS 9.81
DPS 2.00
Dividend payout ratio 20%
Total Dividend 1710.619

Balance Sheet ( in ₹ Millions)

FY 2013/14
SOURCES OF FUNDS :           
Share capital 1,711
Total reserves 67,795

Deposits 597,313 Deposits/Advances

Demand deposits 33,796
Savings deposit 152,843
Term deposits/fixed deposits 410,674

Borrowings 56,880
Borrowings From Reserve Bank of India 4,450
Borrowings From Other Banks 322
Borrowings From Other Financial Institutions 39,033
Borrowings in the form of Bonds / Debentures 1,978
Borrowings From Out of India 11,096
Other Liabilities and Provisions 22,243

Total Liabilities 745,941

APPLICATION OF FUNDS :           

Cash and balance with RBI 31,043
Cash with RBI 25,001
Cash in hand and others 6,042

Balances with Banks and Money at Call 14,251

Bank balance and call money in India 5,733
Bank balance and call money outside India 8,518

Investments in India
Equity Shares - Corporate 241,179
1,758 Invt in India/Deposits

Advances 434,361
Bills purchased and discounted 13,029
Cash credit, overdraft, and loans repayable 229,775
Term loans 191,558

Capital work in progress 226

Net block 4,023
Other assets 20,859

Total Assets 745,941

Forecasted Variable Assumptions 2014/15 2015/16 2016/17 2017/18

79,643 91,352 104,817 120,303

12% Yield assumed similar to FY 2013/14 57,627 66,272 76,212 87,644
2% Yield assumed similar to FY 2013/14 524 524 524 524
7% Yield assumed similar to FY 2013/14 20,434 23,499 27,023 31,077
Same as FY2013/14 1058 1058 1058 1058

7,439 8,015 8,677 9,439

1% In line with loan growth 3,839 4,415 5,077 5,839
Similar to FY 2013/14 1,562 1,562 1,562 1,562
Similar to FY 2013/14 13 13 13 13
Similar to FY 2013/14 1,251 1,251 1,251 1,251
Similar to FY 2013/14 147 147 147 147
Similar to FY 2013/14 415 415 415 415
Similar to FY 2013/14 212 212 212 212

87,082 99,367 113,495 129,742

53,597 60,977 69,458 79,204

7% As % of deposits in line with FY 2013/14 48,409 55,670 64,021 73,624
2% As % of borrowings in line with FY 2013/14 1,230 1,348 1,479 1,622
Similar to FY 2013/14 3,959 3,959 3,959 3,959

33,485 38,390 44,037 50,538

19% Assuming constant cost/income ratio 16,437 18,756 21,423 24,489

2,919 3,190 3,501 3,859

Similar to FY 2013/14 1,116 1,116 1,116 1,116
0.36% Assumed to increase in line with loan growth 1803 2074 2385 2743

14,128 16,444 19,113 22,190

Tax rate assumed 30% 4,239 4,933 5,734 6,657

9,890 11,511 13,379 15,533

Remains same 855 855 855 855

12 13 16 18
3.47 4.04 4.69 5.45
Assuming dividend payout ratio of 30% 30% 30% 30% 30%
2,967 3,453 4,014 4,660

Assumptions 2014/15 2015/16 2016/17 2017/18

Similar to FY 2013/14 1,711 1,711 1,711 1,711

 74,718 82,776 92,141 103,014

138% Deposit is 138% of concerned year advances 686,910 789,946 908,438 1,044,704

10% Assumed to grow in line with FY 2013/14 62,373 68,397 75,003 82,247

Balancing figure 21,610 21,072 20,669 20,449

847,322 963,902 1,097,963 1,252,125

Similar to FY 2013/14 31,043 31,043 31,043 31,043

Similar to FY 2013/14 14,251 14,251 14,251 14,251

40% 277,355
Assuming constant investment to deposit ratio, as in FY 2013/14 318,959 366,802 421,823

Assumed 15% increase in loans 499,515 574,442 660,609 759,700

Similar to FY 2013/14 226 226 226 226

1% Assuming increase in line with FY 2013/14 4,073 4,122 4,173 4,224
Similar to FY 2013/14 20,859 20,859 20,859 20,859

847322 963902 1097963 1252125

2018/19 Steps

138,111 Total 16
100,791 Advances*12% 12
524 Cash balance with RBI * 2% 13
35,738 Invt in India*7% 14
1058 15

10,315 Total 19
6,715 Advances *1% 17
1,562 18
13
1,251
147
415
212

148,426 Total+Total 20

90,404 Total 24
84,667 Deposit*7% 21
1,778 Borrowing*2% 22
3,959 23

58,022 Total Income-Int expended 25

28,016 Total Income*19% 26

4,270 29
1,116 27
3154 28

25,736 Net Int exp - (Op.exp +Prov & cont) 30

7,721 31

18,015 32
855 33

21 34
6.32 36
30% 35
5,404 37

2018/19

1,711 1
 115,625 Op.bal Reserve+NI-Dividend (Can be done at 38

1,201,409 9

90,191 2

20,470 40

1,429,405 39

31,043 3

14,251 4

485,096 10

873,655 5

226 6
4,275 7
20,859 8

1429405 11
 Intrinsic Value Per Share
2014E 2015E 2016E 2017E 2018E
Dividend 2967 3453 4014 4660 5404
TV 60756.94
Dividend + TV 2967 3453 4014 4660 66161

Perpetual growth rate 5.00% (GDP Growth rate)

Equity Value ₹ 44,501.97

No. of shares (in millio 855
Intrinsic Value per shar ₹ 52.05
Current Market Price ₹ 46.00 TV =Dividend 2018*(1+g)/Ke-g)
Upside 13.2%
Rf 8.84%
Beta 1.1
MRP 5%
Ke 14.34%