IndroductionHDFC bank ltd. based in Mumbai, Maharastraincoporated in august 1994 by HousingDevelopment Finance Corporation Limited, whichis India’s largest housing finance company. India’s 3rd largest bank by total assets. 1st bank by market capitalization.
Comparative Liabilities analysis0100000200000300000400000500000Share capital Net worth Total Debt Total liabilitiesHDFCICICIRs. In CroresFigures as of march-12
Comparative Assets analysis0100000200000300000400000500000Advance Investments Net block Total assetsHDFCICICIRs. In croreFigures as of march-12
Earning per share01020304050602009 2010 2011 2012HDFCICICIIt shows the amount ofearning in accordance tothe each share of thecompany.For an investor, ICICIbank will be a betteroption, as its EPS isconsiderably higher
Dividend Payout Ratio0501001502002502012HDFCICICIIndustry avg. Dividend payout tellsabout a company’spayout to itsstakeholders. Higher thevalue, better thepayout. Here, HDFC is havinga better payout ratio.
Asset turnover ratio00.020.040.060.080.10.120.140.162009 2010 2011 2012HDFCICICI Amount of sales/revenuegenerated for every singlerupee worth of assets. It indicates the effectiveuse of assets to generaterevenue/sales. Higher the ratio, higher theefficiency. Here, HDFC is moreefficient.
Return on Networth051015202009 2010 2011 2012HDFCICICI It shows the returnon the total networthof the company. Higher the better. HDFC bank’s has ahigher return.
Price to Earnings ratio05101520252012HDFCICICIIndustryavg. It is the valuation ratioof company’s currentshare price to its pershare earnings. Higher, the better. It tells the growthprospect of acompany.
Debt to Equity Ratio02468102009 2010 2011 2012HDFCICICI It tells the relationshipbetween debt and equitycapital. Higher the value, riskierthe company to invest in. Here, HDFC’s value is wayhigher than ICICI bank, i.eICICI is using less debtcapital structure as toHDFC.
Financial charges coverage ratio00.10.20.30.22.214.171.124.82009 2010 2011 2012HDFCICICI This ratio shows thecompany’s ability to pay itsinterest charges. If a company’s ratio islower than 1, then it is notgenerating enoughrevenues to meet out itsinterest obligation. Here, HDFC is better thanICICI in comparison butstill is in the danger zone.
Quick Ratio051015202009 2010 2011 2012HDFCICICI It tells about the company’sability to pay its current/short-term liabilities quickly. Anything higher than 1, tellsthe company is competentenough to meet its currentliability needs. Here, both the companies arehaving a healthy ratio, butICICI is having much better incompared to HDFC.
ConclusionDespite being in the 3rd in the list, HDFC is having agreat potential to grow and diversify in areasuntapped in the market by reaching to the rural areasand catering them and increasing the base of itscustomers and growing along. Being a bank withhigh CSR activities, it has gained itself a good namein the sector and is thriving by giving back to thesociety and also growing along by satisfying theneeds of its customers.