HDFC Bank: Growing fast - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

HDFC Bank: Growing fast

Nov 13, 2000

HDFC Bank, India’s No. 1 private sector bank, has reported an excellent performance over the years. The bank has achieved strong growth in each of its key business franchisees, driven by an extended product range, enhanced customer acquisition, geographic expansion and higher levels of penetration. The bank has a network of 125 branches and 144 ATMs across the country. Investment in alternative channels of distribution – phone banking, net banking and mobile banking has helped the bank to provide value added services to its customers. The bank’s deposit base in the last five years has increased to Rs 84 bn, a compounded annual growth rate of 87%. During the same period its advances grew by a CAGR of 74% to Rs 34 bn. Its lower credit/deposit ratio of 0.4 times suggests its increasing investments. The bank’s investments (government securities, bonds, shares and mutual funds) in the past five years grew at a CAGR of 107% to Rs 57 bn and are comparatively higher than its advances. Currently income from investments accounts for more than 50% of its total operating income. This volatile stream of revenues could affect its future growth of operating income, which has grown at a CAGR of 68% in the past three years.

Financial Snapshot
  Fiancial Year CAGR
Year ended March 1998 1999 2000 Past 3 yrs Next 3 yrs*
Operating income 2,408.0 3,760.8 6,798.7 68.0% 37.2%
Other income 620.1 681.0 1,253.5 42.2% 30.0%
Total revenues 3,028.1 4,441.8 8,052.2 63.1% 36.4%
Operating profit 1,032.5 1,469.0 3,055.9 72.0% 26.6%
Profit before tax 943.7 1,169.0 1,948.8 43.7% 29.0%
Profit after tax 631.7 824.3 1,200.4 37.9% 29.0%
* Projected

Particulars FY98 FY99 FY00
Operating margins 42.9% 39.1% 44.9%
Net profit margins 26.2% 21.9% 17.7%
EPS (Rs) 3.2 4.1 4.9

The productivity measures in general have shown an improved performance in FY00. Nevertheless, the critical thing to watch for is an improvement in these ratios in the coming years. With its merger of Times Bank, FY01 could show outstanding results. But we believe, operating income and profit growth of the bank could slow down in the next few years, as competition intensifies leading to pressure on margins.

Productivity measures
Particulars FY98 FY99 FY00
Net profit/employee (Rs m) 1.0 0.8 0.8
Deposits/employee (Rs m) 33.0 30.0 42.0
Deposits/branch (Rs m) 644.6 511.4 759.3
Employees/branch (x) 19.4 17.3 13.5
Credit/Deposit Ratio (x) 0.38 0.48 0.40

Equitymaster requests your view! Post a comment on "HDFC Bank: Growing fast". Click here!

  

More Views on News

HDFC Bank Posts Good Q4 Performance Amid Covid-19 Second Wave (Company Info)

Apr 20, 2021

Key takeaways from HDFC Bank's March quarter (Q4FY21) results.

HDFC BANK Announces Quarterly Results (3QFY21); Net Profit Up 18.1% (Quarterly Result Update)

Jan 18, 2021 | Updated on Jan 18, 2021

For the quarter ended December 2020, HDFC BANK has posted a net profit of Rs 88 bn (up 18.1% YoY). Sales on the other hand came in at Rs 301 bn (up 2.4% YoY). Read on for a complete analysis of HDFC BANK's quarterly results.

HDFC BANK Announces Quarterly Results (2QFY21); Net Profit Up 18.4% (Quarterly Result Update)

Oct 19, 2020 | Updated on Oct 19, 2020

For the quarter ended September 2020, HDFC BANK has posted a net profit of Rs 75 bn (up 18.4% YoY). Sales on the other hand came in at Rs 300 bn (up 6.4% YoY). Read on for a complete analysis of HDFC BANK's quarterly results.

Union Bank of India Swings to Profit as Asset Quality Improves (Views On News)

Jun 8, 2021

Union Bank's share price up 2% post March quarter earnings.

PNB Reports Profit in March Quarter After Three-Way Amalgamation (Views On News)

Jun 8, 2021

Shares of PNB fell over 2% yesterday despite healthy quarterly results.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

Don't Break These 5 Intraday Trading Rules (Fast Profits Daily)

Jun 1, 2021

To become a better intraday trader, follow these rules religiously.

Is the RBI's 'Bubble Talk' Signalling a Market Crash? (Profit Hunter)

May 31, 2021

Is the Indian central bank correct in warning you about a market crash?

Rs 2 Trillion Stimulus Coming to a Stock Market Near You (Profit Hunter)

Jun 2, 2021

Get ready to profit from a massive stimulus that you've never seen before.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

HDFC BANK SHARE PRICE


Jun 11, 2021 (Close)

TRACK HDFC BANK

  • Track your investment in HDFC BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

COMPARE HDFC BANK WITH

MARKET STATS