hfdc bank-financial analysis
TRANSCRIPT
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CONTENT
1. INTRODUCTION
2. CURRENT POSITION
3. TREND ANALYSIS (HORIZONTAL)
4. COMMON SIZE FINANCIAL STATEMENT (VERTICAL)
5. RATIO ANALYSIS
6. CAPITAL ADEQUACY RATIO (CAR)
7. REFRENCE
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INTRODUCTION
HDFC Bank Limited is an Indian banking and financial services company
headquartered in Mumbai , Maharashtra
Incorporated in 1994 and is second largest private bank in India
Largest private sector bank by market capitalization as of December 2015, at
approximately Rs.2,67,293.02 crores.
HDFC Bank Limited is ranked 21st in India’s top 500 companies by revenue. (ET)
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HDFC Bank Ltd. is ranked 58th among India's most trusted brands.
It is among the Top 50 most valued global bank in terms of market
capitalization.
It is the second-largest private lender in terms of asset size, ranks 45th, with a
market capitalization of $39 billion.
Mr. Aditya Puri is the Managing Director HDFC Bank, and has held this
position since 1994.
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HDFC Bank offers the following core products:
Personal Banking Accounts & Deposits Loans Cards DMAT Investments Insurance Forex Premier Banking Private Banking
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The Stock price of HDFC Bank Ltd. registered in BSE/NSE are 1060/1062
respectively.
The Bank’s distribution network was at 4014 branches in 2,464 cities in
India, the Bank also has a network of 11,766 ATMs across India .
The Bank has overseas branch operations in Bahrain, Hong Kong and
Dubai.
HDFC BANK OPERATIONS IN WORLD
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COMPARISON
42%
35%
8%4%
11%
HDFC Bank
Revenue Total Exp PATTax Profit
43%
35%
8%3%
11%
ICICI Bank
Revenue Total Exp PATTax Profit
Revenue 61,267.27
Total Exp. 50,091.92
PAT 11,175.35Tax 4645Profit 15800.2
Revenue 60,212.17
Total Exp. 49,512.14
PAT 10,700.05Tax 5387.44Profit 16087.49
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Intrest from advances
65%
Intrest from investment
20%
Commision,exchnage and brokerage
12%
Others4%
HDFC
Intrest from advances
80%
Intrest from investment
3%
Commision,exchnage and brokerage
16%
Others1%
ICICI
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HORIZONTAL ANALYSIS Increase/(Decrease) Mar’15 Mar’14 Amount (Cr) % • Revenue 60,212.17 50,852.52 9359.65 18.40• Expenses 49,512.14 42,088.01 7424.13 17.63• Net Income 10,700.05 8,764.51 1935.54 22.08
These percentages were calculated bydividing each item by the base year.
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TREND ANALYSIS
Year Mar’15 Mar’14 Mar’13 Mar’12 Mar’11
Revenue 60,212.17 50,852.52 42,993.98 34,185.72 24,628.38
Cost of sales 49,512.14 42,088.01 36,093.71 28,912.32 20,610.68
Profit 10,700.05 8,764.51 6,900.28 5,273.40 4,017.69
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Year Mar’15 Mar’14 Mar’13 Mar’12 Mar’11
Revenues 244.48 % 206.47% 174.57% 138.80% 100%
Cost of sales 240.22 % 204.20% 175.12% 140.27% 100%
Gross profit 266.32 % 218.14% 171.74% 131.25% 100%
These percentages were calculated bydividing each item by the base year.
TREND PERCENTAGES
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TREND ANALYSIS
2015 2014 2013 2012 20110
2000
4000
6000
8000
10000
12000
Profit
Profit
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VERTICAL ANALYSIS
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Consolidated Profit & Loss account in Rs . Cr.
Mar '15Mar ‘15 12 mths %
Income
Interest Earned 50,666.49 84.15
Other Income 9,545.68 15.85
Total Income 60,212.17 100
Expenditure
Interest expended 27,288.46 45.32
Employee Cost 5,162.68 8.43
Selling, Admin & Misc Expenses
16,380.55 26.76
Depreciation 680.45 1.13Preoperative Exp Capitalised 0 0
Operating Expenses 14,577.53 23.81Provisions & Contingencies 7,646.15 12.49
Total Expenses 49,512.14 82.229Net Profit for the Year 10,700.05 17.771
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Capital and Liabilities: 2015 2015
Rs %
Equity Share Capital 501.3 0.084
Share Application Money 0
Preference Share Capital 0
Reserves 61,508.12 10.41
Net Worth 62,009.42 10.50
Deposits 450,795.64 76.34
Borrowings 45,213.56 7.65
Total Debt 496,009.20 83.99
Other Liabilities & Provisions 32,484.46
Total Liabilities 590,503.08 100
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Assets
Cash & Balances with RBI 27,510.45 4.65
Balance with Banks, Money at Call 8,821.00 1.49
Advances 365,495.03 61.89Investments 166,459.95 28.18Gross Block 3,121.73 0.52
Revaluation Reserves 0
Accumulated Depreciation 0
Net Block 3,121.73 0.52Capital Work In
Progress 0
Other Assets 19,094.91 3.23Total Assets 590,503.07 100
Contingent Liabilities 997,538.88
Bills for collection 0Book Value (Rs) 247.39
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RATIO ANALYSIS
1. Current ratioThe current ratio measures the company’s ability to pay current liabilities with current assets.
For 2015 CR = 27,510.45+8821.00 32484.46 = 1.11
CR Current AssetsCurrent Liabilities
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2. Quick ratioThe quick ratio shows the company’s ability to pay all current liabilities if they come due immediately (without relying on the sale of its inventory).
For 2015 QR = 36331.45 32484.46 = 1.11
QR Current Assets InventoriesCurrent Liabilities
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3. Cash ratio
The Cash ratio shows the company’s ability to pay all current liabilities if they come due immediately.
For 2015 Cash Ratio = 27510.45 32484.46 = 0.846
Cash RatioCash
Current Liabilities
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4. Fixed Asset Turnover Ratio
For 2015 Fixed Asset Turnover = 50666.49 3121.734 = 16.23
Fixed Asset TurnoverSales
Net Fixed Assets
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5. Total Asset Turnover Ratio
For 2015 Total Asset Turnover = 48469.90 590503.08 = 0.082
Total Asset Turnover SalesTotal Assets
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6. Long -term debt ratio
For 2015 Long term Debt ratio = 45,213.56 + 496,009.20 590,503.07 = 0.916
LongtermDebt Ratio Long termDebtTotal Assets
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7. Debt to equity ratio
Debt to equity ratio = Debt Equity
For 2015 Debt to equity ratio = 496009.20 501.3 = 989.44
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8. Operating Profit Margin
For 2015 OPM = 15862.27 48469.90 = 0.327
OPM NetOperating IncomeSales
EBITSales
OPM =
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9. Net Profit Margin (Return on Sales)
For 2015 NPM = 10700.03 48469.90 = 0.221
NPMNet Income
Sales
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10. Return on Total Assets
For 2015 ROA = 10700.03 590503.07 = 0.018
ROANet IncomeTotal Assets
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11. Return on Equity
For 2015 ROE = 10700.03 501.29 = 21.34
ROE Net IncomeTotalEquity
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12. EPS EPS = Net Profit No of equity sharesFor 2015 EPS = 10215.91 239905.04 = 0.043
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CAPITAL ADEQUACY RATIO
Capital Adequacy Ratio (CAR), also known as Capital to Risk (Weighted) Assets Ratio (CRAR), is the ratio of a bank's capital to its risk.
It is a measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures.
This ratio is used to protect depositors and promote the stability and efficiency of financial systems around the world.
Two types of capital are measured: 1. Tier one capital 2. Tier two capital.
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TIER 1 CAPITAL = (paid up capital + statutory reserves + disclosed free reserves) - (equity investments in subsidiary + intangible assets + current & b/f losses)
TIER 2 CAPITAL = A) Undisclosed Reserves + B) General Loss reserves + C) hybrid debt capital instruments and subordinated debts
CAR= Tier 1 capital + Tier 2 capital Risk weighted assets CAR=T1 +T2 ≥ 9% @
The percent threshold varies from bank to bank (10% in this case, a common requirement for regulators conforming to the Basel Accords and is set by the national banking regulator of different countries.
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CAR= Tier 1 capital + Tier 2 capital Risk weighted assets
Tier 1 CapitalTier 1 = (paid up capital + statutory reserves + disclosed free reserves) - (equity investments in subsidiary + intangible assets + current & b/f losses )Tier 1 = ( 501.30+61,508.12+140)-(1950.74+2201.41+222.81+52.39)Tier 1 = 57722.07.
Tier 2 CapitalTier 2 =Undisclosed Reserves + General Loss reserves + hybrid debt capital instruments and subordinated debtsTier 2 =13244.22.
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CAR = 57722.07+13244.22 ≥ 10% 422669.92 CAR = 16.79%
NOTE=( All figures in above is in Rs crores )
CAR = T1 +T2 ≥ 10% @
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REFRENCE
• HDFC Annual report (2015 2014 2013 2012 2011)• The Economic Times Of India• Rediff.com• Bombay stock exchange• Investopedia
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THANK YOU