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HDFC BANK
CMP- Rs. 2,091.60 DATE- 25.06.2018
HIGHLIGHTS:
Banking sector is sufficiently
capitalized and well regulated in
Indian economy. Total money
supply increased at a CAGR of
11.4%, lending and deposits
increased at a CAGR of 20.7% and
19% respectively. Strong growth in
savings amid rising disposable
income levels are the major
factors influencing deposits
growth. Roughly, the contribution
of the Banking sector to GDP is
about 7.7%.
HDFC Bank Limited is a major
Indian commercial bank in the
private sector. It was incorporated
in 1994.This Bank is engaged in
providing a range of banking and
financial services including retail
banking, wholesale banking and
treasury operations. HDFC Bank
has recorded a healthy market
capitalization of Rs. 544,506.16
Cr. The financial performance of
Bank during the year ended 31st
march 2018 remained healthy
with Income increasing by 17.64 %
to Rs. 10,134,445 lakh from Rs.
8,614,899 Lakh in the previous
financial year 2016-17. Over the
course of 5 periods Income grew
from Rs. 5,085,252 lakh in FY
2013-14 to Rs. 10,134,445 lakh in FY 2017-18, its compound annual growth rate or its overall return was
14.79%. NII increased by 21.79 % and stood at Rs. 4,290,636 lakh in FY 2017-18 as against Rs. 3,522,977
lakh in previous FY 2016-17.Total expenses of the Bank reached to Rs 8,278,361 lakh by an increase of
COMPANY DETAILS
INDUSTRY BANKING & FINANCIAL SERVICES
MARKET CAP Rs. 544,506.16 Cr
52 WEEKS LOW / HIGH 1644.05/2170.05
BSE/ NSE CODE 500180/HDFCBANK
HEADQUATERS MUMBAI , MAHARASTRA, INDIA
FINANCIALS (In Lakh)
ITEMS 2015-16 2016-17 2017-18
INCOME 7,437,322 8,614,899 10,134,445
EXPENDITURE 6,155,589 7,086,158 8,278,361
PROFIT 1,280,133 1,525,303 1,851,002
NII 2,909,199 3,522,976 4,290,636
ASSETS 73,026,182 89,234,416 110,318,617
TOTAL BUSINESS 103,316,371 122,861,524 148,840,898
NPA (%) 0.28% 0.33% 0.40%
SHARE HOLDING PATTERN
SEGMENT WISE REVENUE
25.66%
12.08%40.43%
21.83%
Promoters
Mutual Fund
Foreign portfolio Investors
Others
13%
48%
27%
12% TREASURY
RETAIL BANKING
WHOLESALE BANKING
OTHER BANKING OPERATIONS
16.82 % from the FY 2016-17. Net Profit for the FY 2017-18 was Rs. 1,851,002 lakh, higher by 21.35% as
compared to previous FY 2016-17. Total Business (Deposit + Advances) has recorded Rs 148,840,898
lakh in FY 2017-18. HDFC Bank is the second largest private bank in India as measured by assets. NPA has
increased from 0.33% in FY 2016-17 to 0.40 % in FY 2017-18.It is the largest bank in India by market
capitalization. Bank has two subsidiaries, HDB Financial Services Limited and HDFC Securities Limited. As
per the shareholding pattern, Foreign portfolio investors held 40.43 % of total shares , afterwards
Promoters, Mutual Funds and Others held 25.66%,12.08% ,& 21.83% respectively. The Bank earned
more revenue from retail banking segment which was 48% of the total revenue. In Previous FY 2016-17
it was 50% of total revenue.
FINACIAL PERFORMANCE:
PARTICULARS 2016-17 2017-18
(Rs. In lakh)
NET WORTH 9,179,395 10,959,912
BORROWINGS 9,841,564 15,644,208
INVESTMENTS 21,077,711 23,846,092
ADVANCES 58,548,099 70,003,384
NET PROFIT MARGIN (%) 17.71 18.26
EPS(Rs.) 59.16 70.76
ROA (%) 1.71 1.68
ROE (%) 16.62 16.89
The financial performance of the Bank remained healthy during the FY2017-18 with Net worth
increasing by 19.40 % to Rs. 10,959,912 lakh from Rs. 9,179,395 lakh in the previous FY 2016-17.The
Bank posted borrowings & Investments of Rs. 15,644,208 lakh & Rs. 23,846,092 lakh respectively for the
FY 2017-18 as against Rs. 9,841,564 lakh & Rs. 21,077,711 lakh respectively for the FY 2016-17.Advances
stood at Rs. 70,003,384 lakh in FY 2017-18.Net profit margin of the bank has increased to 18.26 % in FY
2017-18 from 17.71 % In FY 2016-17. EPS has increased by 19.60 % from Rs. 59.16 in FY 2016-17 to Rs.
70.76in FY 2017-18.ROA & ROE stood at 1.68 % &16.89 % respectively in FY2017-18.
FINANCIAL ANALYSIS:
SHAREHOLDERS' FUND:
By considering the above graph we can analyze, shareholder’s Fund of the company increased Y-O-Y.
Shareholders’ Fund stood at Rs. 10,959,912 Lakh for the FY 2017-18, increased by 19.40 % as compared
to the previous FY 2016-17 mainly on account of increase in share capital of 1.27 % and reserve and
surplus of 19.50 %.Reserve and surplus stood at Rs. 10,908,011 Lakh in FY 2017-18 on the back of
increase in Statutory reserve, General reserve, Share premium account, Capital reserve and Foreign
currency translation account respectively.
ASSETS:
As like shareholders’ Fund, assets of the Bank has recorded as impressive growth in Y-O-Y basis .In FY
2017-18, It has increased by 23.63 % to reach at Rs 110,318,617 Lakh as against as Rs 89,234,416 Lakh in
4,416,573
6,315,4077,430,413
9,179,395
10,959,912
2013-14 2014-15 2015-16 2016-17 2017-18
SHAREHLODERS' FUND (In Lakh)
50,361,99660,709,652
73,026,182
89,234,416
110,318,617
2013-14 2014-15 2015-16 2016-17 2017-18
ASSETS (In Lakh)
FY 2016-17 mainly on account of an increase in Cash and balances with Reserve Bank of India of 176.15
% , Balances with banks and money at call and short notice of 61.16%, Investments of 13.13% and
Advances of 19.57% etc.
TOTAL BUSINESS:
The above graph depicts that both deposits & advances is moving up Y-O-Y. The total Business of the
bank registered a growth of 21.15 % to reach at Rs. 148,840,898 lakh as on 31st mar 2018, while the
total deposits increased by 22.58 % to reach Rs. 78,837,514 lakh & total advances grew by 19.57 % to
reach Rs. 70,003,384 lakh as on 31st mar, 2018. Strong growth in savings amid rising disposable income
levels are the major factors influencing deposit growth.
CASA:
By considering the above graph we see that both saving deposits and current deposits are moving
upward momentum in Y-O-Y basis. Savings Account Deposits grew by 15.61 % to Rs. 22,379,687 lakh
36,708,033 45,028,365 54,587,329 64,313,425 78,837,51431,541,886 38,340,79748,729,042
58,548,09970,003,384
2013-14 2014-15 2015-16 2016-17 2017-18
TOATL BUSINESS
DEPOSITS (In Lakh) ADVANCES (In Lakh)
10,313,261 12,492,660 14,788,612 19,357,863 22,379,6876,129,7497,333,874
8,827,424
11,536,98511,901,021
2013-14 2014-15 2015-16 2016-17 2017-18
CASA
SAVING DEPOSITS (In Lakh) CURRENT DEPOSITS (In Lakh)
while Current Account Deposits grew by 3.16 % to Rs. 11,901,021lakh as on March 31, 2018. The
proportion of Current and Savings Deposits to total deposits was at 48.97 per cent as on March 31,
2018.
INVESTMENTS:
By looking the above graph it could be analyze that, Investment of the bank has grown Y-O-Y. The
Investment portfolio of the Bank has reached to Rs. 23,846 092 Lakh as on 31st mar 2018, which
increased by 13.13 % from the previous year due to more investment in Government securities, shares,
Debentures and bonds, in India & also other investment in outside India.
INCOME VS. EXPENDITURE:
11,957,10614,945,441 16,168,334
21,077,71123,846,092
2013-14 2014-15 2015-16 2016-17 2017-18
INVESTMENTS (In Lakh)
5,085,2526,021,218
7,437,3228,614,899
10,134,445
4,208,8024,951,213
6,155,5897,086,158
8,278,361
2013-14 2014-15 2015-16 2016-17 2017-18
INCOME VS. EXPENDITURE
INCOME (In Lakh) EXPENDITURE (In Lakh)
By considering the above graph we can analyze that both the income & expenditure line have increased
in same manner. In FY 2017-18, Income & Expenditure stood at Rs. 10,134,445 lakh & Rs. 8,278,361
Lakh respectively.
INCOME:
The financial performance of HDFC Bank during the year ended march 31st , 2018 remained tough with
total income increasing by 17.64 % to Rs. 10,134,445 lakh from Rs. 8,614,899 Lakh in the previous
financial year march 31st 2017.
Income growth was driven by an increase in both interest earned & other income. Interest earned
was up by 16.39 % from Rs. 7,327,135 lakh in FY 2016-17 to Rs. 8,528,784 lakh in FY 2017-18 due to
increase in discount on advances, Income from investments, and others
Other Income grew 24.69 % over that of the previous year to Rs. 1,605,660 lakh during the year
ended 31st March 2018. The largest component of Other Income was Commission, exchange and
brokerage. The other income drivers were Profit on sale of investments, Profit on sale of building
and other assets, Profit on exchange / derivative transactions and Miscellaneous income.
NET INTEREST INCOME:
NII recoded an impressive growth of Rs. 4,290,636 lakh in FY 2017-18 as against as Rs. 3,522,977 lakh in
FY 2016-17which grew by 21.79%.
EXPENSES:
Total expenditure stood at Rs. 8,278,361 lakh in FY 2017-18.
1,910,9572,337,803
2,909,199
3,522,977
4,290,636
2013-14 2014-15 2015-16 2016-17 2017-18
NET INTEREST INCOME (In Lakh)
Interest expanded increased by 11.40 % to reach at Rs. 4,238,148 lakh in the year ended 31st March
2018 mainly on account of Interest on deposits, Interest on RBI / inter-bank borrowings etc.
Operating expenses grew by 15.30 % to reach at Rs. 4,238,148 lakh in the year ended 31st Mar 2018
because of increase in Payments to and provisions for employees, Rent, taxes and lighting, Printing
and stationery, Advertisement and publicity, Depreciation on bank's property, Auditors' fees and
expenses, Law charges, Postage, telegram, telephone etc, Repairs and maintenance, Insurance etc.
Total Provisions and Contingencies were Rs. 1,647,490 lakh for the year ended March 31, 2018 as
compared to Rs. 1,206,893 lakh in the year ended 31st March 2017 year. Bank’s provisioning
policies remain higher than regulatory requirements.
NET PROFIT:
By looking the 5 years performance, it could be analyzed that, Net profit of the bank has grown Y-O-Y.
The net profit for the year ended March 31st, 2018 was Rs. 1,851,002 lakh, up 21.35% over the year
ended March 31st 2017 owing to increase in net interest income, profit on sale of investments, profit
on revaluation of investments etc.
NET PROFIT MARGIN:
874,3491,068,889
1,280,1331,525,303
1,851,002
2013-14 2014-15 2015-16 2016-17 2017-18
NET PROFIT (In Lakh)
17.19
17.75
17.21
17.71
18.26
2013-14 2014-15 2015-16 2016-17 2017-18
NET PROFIT MARGIN (%)
During the FY 2017-18, Net profit Margin stood at 18.26% , as against 17.71 % in the previous year 2016-
17 .It has increased 0.55 % as compared to its previous FY 2016-17 because of well control of expenses.
EPS VS. BPS:
Earnings per share has increased from Rs. 59.16 in the year ended 31st March 2017 to Rs. 70.16 in the
year ended 31st March 2018 , primarily on account of increase in Net profit of the company.
During the FY 2017-18, Book value per share grew at Rs. 64.12 from the previous financial year ended 31
march 2018 due to increase in Net worth as well as No. of outstanding common shares. In FY 2017-18,
BPS stood at Rs. 422.33.
RETURNS:
36.31 43.6 50.24 59.16 70.76
184.1251.96
293.9358.2138972
422.332609
2013-14 2014-15 2015-16 2016-17 2017-18
EPS VS. BPS
EPS (Rs.) BPS (Rs.)
1.74 1.76 1.75 1.71 1.68
19.8016.93 17.23 16.62 16.89
2013-14 2014-15 2015-16 2016-17 2017-18
RETURNS
ROA(%) ROE (%)
Return on Equity reached to 16.89 % in the fiscal year ended 31st Mar 2018, marginally higher by 0.27 %
as compared to previous year ended 31st Mar 2017. Return on Assets for the year 2017-18 was 1.68 %,
which was a little bit lower as compared to previous year 2016-17.
NPA:
Net NPA was 0.40 % in the year ended 31st march 2018 as against 0.33 % in the year ended 31st march
2017 due to increase Provisions & contingencies.
CASH FLOW ANALYSIS:
By considering the above graph it could be analyzed that, Net cash flow was negative in FY 2014-15
mainly on account of Purchase of fixed assets, Investment in subsidiaries and / or joint ventures,
Dividend paid. After this year, company has positive cash flow. In FY 2017-18, net cash flow of the
company was Rs. 7,375,043 lakh due to positive cash flow in financing activities and operating activities.
0.25 0.250.28
0.33
0.40
2013-14 2014-15 2015-16 2016-17 2017-18
NET NPA (%)
1,238,226
-338,701
254,2461,024,224
7,375,044
2013-14 2014-15 2015-16 2016-17 2017-18
NET CASH FLOW (In Lakh)
CONCLUSION:
HDFC Bank has positioned itself as a bank which gives higher standard of services through product
innovation for the diverse need of individual & corporate clients. In FY 2017-18, the financial
performance was healthy, impressive & also recorded a positive cash flow.
CONSOLIDATED BALANCE SHEET OF HDFC BANK Rs. In Lakh
PARTICULARS 2013-14 2014-15 2015-16 2016-17 2017-18
CAPITAL AND LIABILITIES
Capital 47,891 50,130 50,564 51,251 51,902
Reserves and surplus 4,368,682 6,265,277 7,379,849 9,128,144 10,908,011
Minority interest 15,174 16,163 18,062 29,144 35,633
Deposits 36,708,033 45,028,365 54,587,329 64,313,425 78,837,514
Borrowings 4,959,672 5,947,825 7,176,345 9,841,564 15,644,208
Other liabilities and provisions
4,262,455 3,401,893 3,814,033 5,870,888 4,841,349
Total 50,361,996 60,709,652 73,026,182 89,234,416 110,318,617
ASSETS
Cash and balances with Reserve Bank of India
2,535,722 2,752,229 3,007,658 3,791,055 10,468,821
Balances with banks and money at call and short
notice
1,455,621 900,413 899,230 1,140,057 1,837,335
Investments 11,957,106 14,945,441 16,168,334 21,077,711 23,846,092
Advances 31,541,886 38,340,797 48,729,042 58,548,099 70,003,384
Fixed assets 302,328 322,494 347,970 381,470 381,056
Other assets 2,569,303 1,966,457 3,873,948 4,296,024 3,781,929
Total 50,361,996 60,709,652 73,026,182 89,234,416 110,318,617
Contingent liabilities 72,317,291 97,527,860 85,352,738 81,828,429 87,577,697
Bills for collection 2,094,306 2,230,493 2,349,000 3,084,804 4,275,383
CONSOLIDATED PROFIT & LOSS OF HDFC BANK Rs. In Lakh
PARTICULARS 2013-14 2014-15 2015-16 2016-17 2017-18
INCOME
Interest earned 4,255,502 5,066,649 6,316,156 7,327,135 8,528,784
Other income 829,750 954,568 1,121,165 1,287,763 1,605,660
INCOME 5,085,252 6,021,218 7,437,322 8,614,899 10,134,445
EXPENDITURE
Interest expended 2,344,545 2,728,846 3,406,957 3,804,158 4,238,148
Operating expenses 1,246,965 1,457,752 1,783,188 2,075,107 2,392,722
Provisions and contingencies 617,291 764,615 965,443 1,206,893 1,647,490
EXPENDITURE 4,208,802 4,951,213 6,155,589 7,086,158 8,278,361
PROFIT
Net profit for the year 876,451 1,070,005 1,281,733 1,528,740 1,856,084
Less : Minority interest 2,465 1,441 1,972 3,672 5,134
Add : Share in profits of associates
36,316 32,494 37,278 234 52
Consolidated profit for the year attributable to the Group
874,349 1,068,889 1,280,133 1,525,303 1,851,002
Impact on amalgamation [Refer Schedule
2,745
Balance of profit brought forward
1,147,594 1,520,747 1,955,086 2,482,559 3,453,233
2,021,942 2,589,636 3,235,220 4,010,606 5,304,235
APPROPRIATIONS
Transfer to Statutory Reserve 216,145 262,387 318,093 377,716 456,203
Proposed dividend 164,335 200,520 240,178
Tax (including cess) on dividend
28,497 42,454 51,235 2,560 5,077
Dividend (including tax / cess thereon) pertaining to previous
year paid during the year
485 84 -1,171 -169 339,058
Transfer to General Reserve 85,584 103,859 122,962 145,496 174,867
Transfer to Capital Reserve 5,827 22,492 22,215 31,341 23,552
Transfer to / (from) Investment Reserve Account
322 2,754 -852 429 -4,420
Balance carried over to Balance Sheet
1,520,747 1,955,086 2,482,559 3,453,233 4,309,898
Total 2,021,942 2,589,636 3,235,220 4,010,606 5,304,235
EPS (Face value Rs. 2/- per share)
Basic 36.58 44.10 50.85 59.95 71.73
Diluted 36.31 43.60 50.24 59.16 70.76
CONSOLIDATED CASH FLOW STATEMENT OF HDFC BANK Rs. In Lakh
PARTICULARS 2013-14 2014-15 2015-16 2016-17 2017-18
Cash flows from operating activities
Consolidated profit before income tax
1,318,964 1,606,829 1,949,499 2,333,115 2,841,311
Adjustments for:
Depreciation on fixed assets 68,868 68,045 73,803 88,619 96,678
(Profit) / loss on revaluation of investments
-651 -5,563 1,737 -875 15,704
Amortization of premier on held to maturity investments
8,065 8,055 10,028 17,566 35,991
(Profit) / loss on sale of fixed assets
-337 -1,113 12 162 118
Provision / charge for non performing assets
185,062 203,774 251,799 370,243 575,533
Provision for dimunition in value of investments
-412 -382 1,465 -764 3,081
Floating provisions 5,768 3,220 11,500 2,500
Provision for standard assets 23,435 31,035 46,489 43,123 65,757
Provision for wealth tax 77 77
Contingency provisions -29,339 5,904 2,186 3,884 39,612
Share in current year's profits of associates
-363 -325 -373 -234 -52
1,579,136 1,919,556 2,348,146 2,857,339 3,673,734
Adjustments for:
(Increase) / decrease in investments (excluding
investments in subsidiaries and joint ventures)
-867,704 -4,502,040
-1,235,750 -1,732,577 -2,823,105
(Increase) / decrease in advances -7,004,150
-7,035,602
-10,660,130
-10,189,050
-12,030,537
Increase / (decrease) in deposits 7,098,856 8,320,332 9,558,964 9,726,096 14,524,089
(Increase) / decrease in other assets
-661,787 663,282 -384,857 -448,553 523,364
Increase / (decrease) in other liabilities and provisions
697,616 -928,892 313,247 2,283,377 -1,145,118
Increase / (decrease) in borrowings
- -
841,967 -1,563,364
-60,381 2,496,631 2,722,428
Direct taxes paid (net of refunds) -420,903 -564,734 -707,309 -768,472 -1,000,990
Net cash flow (used in) / from operating activities
421,063 -2,128,098
-767,690 1,728,159 1,721,438
Cash flows used in investing activities
Purchase of fixed assets -85,309 -77,236 -87,716 -115,776 -160,819
Proceeds from sale of fixed assets 1,300 3,311 1,161 1,008 77,033
Investment in subsidiaries and / or joint ventures
-22,658 -7,157 - -1,433
Net cash used in investing activities
-106,666 -81,082 -86,555 -114,768 -85,219
Cash flows from financing activities
Increase in minority interest 4,030 4,915 1,900 8,186 6,666
Money received on exercise of stock options by employees
72,329 99,542 122,290 226,152 272,591
Increase / (decrease) in borrowings (excluding subordinate
debt, perpetual debt and upper tier II instruments)
981,380 976,968 1,344,965 -338,987 5,010,144
Proceeds from issue of shares under Qualified Institutions
Placement and American Depository Receipt offering (net of
issue expenses)
- 972,279 - 1,000,000
Proceeds from issue of upper and lower tier II capital instruments
23,000 50,000 -
Redemption of subordinated debt - -41,400 -120,200 -190,845 -207,500
Dividend paid during the year -131,407 -164,928 -200,917 -240,831 -283,127
Tax on dividend -22,318 -27,989 -42,371 -52,973 -61,007
Net cash generated from financing activities
927,015 1,869,387 1,105,667 -589,297 5,737,766
Effect of exchange fluctuation on translation reserve
-3,185 1,092 2,824 -2,826 1,059
Cash and cash equivalents on amalgamation
2,956
Net increase / (decrease) in cash and cash equivalents
1,238,226 -338,701 254,246 1,024,224 7,375,044
Cash and cash equivalents as at April 1st
2,753,116 3,991,343 3,652,642 3,906,888 4,931,112
Cash and cash equivalents as at March 31st
3,991,343 3,652,642 3,906,888 4,931,112 12,306,156
REFERENCE:
http://www.hdfcbank.com/
https://en.wikipedia.org/wiki/HDFC_Bank