The document analyzes various financial ratios of HDFC Bank over a 5-year period from 2012 to 2016 to evaluate the bank's profitability, liquidity, operational efficiency, and financial health. The ratios analyzed include current ratio, quick ratio, interest spread, net profit margin, return on equity, credit deposit ratio, loan-to-deposit ratio, earnings per share, and total debt to owners' fund. The analysis found that while some ratios like quick ratio and EPS increased steadily, others like interest spread, net profit margin, and return on equity witnessed fluctuations, indicating changes in the bank's profitability and decisions over time.

1. FINANCIAL
STATEMENTS
Anubha Jindal
Anushka Anand
Chavi Goel
Kriti Sharma
Rishabh Chowdhry
Shruti Jain
Financial Analysis of

2. Introduction
HDFC Bank is an Indian banking and financial
services company headquartered in Mumbai,
Maharashtra.
The MD and CEO of the company is Amitabh
Chaudhry, ED and CFO is Vibha Padalkar
Amitabh Chaudhry Vibha Padalkar
It is largest bank in India by market capitalization
as of February 2016.

3. Products
Retail Banking Treasury Car Loans
Personal Loans Loans against property Credit Cards

4. Objective of this Study
• Financial analysis refers to collecting the
financial data
• Making comparisons amongst different
variables
Balance
Sheet
P&L
Statment
• Financial ratios allow logical
relationships between different variables
• The main source of financial information
is the balance sheet and the income
statement.

5. Methodology
Ratio analysis is the process of determining and interpreting
numerical relationships based on financial statements
Analyzing Financial
Statements
Judging Efficiency Locating weakness Formulating plans Comparing Performance

6. Focus areas
Profitability Operational SolvencyLiquidity

7. Ratios
0.08
0.06 0.06
0.04
0.07
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
Mar '12 Mar '13 Mar '14 Mar '15 Mar '16
Current ratio
CURRENT RATIO:
• The current ratio is a liquidity ratio that measures a company's ability to pay
short-term and long-term obligations.
• a current ratio below 1 shows that the bank is not in good financial health
Since current ratio for all the year is
below 1 , it is not a good sign.

8. Ratios
QUICK RATIO
• The quick ratio measures a company’s ability to meet its short-term obligations
with its most liquid assets.
• The higher the quick ratio, the better the company's liquidity position.
Quick ratio is increasing in every
next year highest being in 2016.
Mar '12 Mar '13 Mar '14
Mar '15 Mar '16
QUICK RATIO 6.2 7.84 8.55 12.69 14.51
0
2
4
6
8
10
12
14
16
QUICK RATIO

9. Ratios
Interest spread
• Interest spread is the difference between the average lending rate and the
average borrowing rate for a bank or other financial institution.
• The greater the spread, the more profitable the financial institution is likely to
be; the lower the spread, the less profitable the institution is likely to be.
Over the past 5 years the interest spread has
lowered, indicating that the institution is not
as profitable as it was before.
Mar '12
Mar
'13
Mar
'14
Mar '15 Mar '16
Interest Spread 8.42 8.78 8.01 8.01 7.52
8.42
8.78
8.01 8.01
7.52
6.8
7
7.2
7.4
7.6
7.8
8
8.2
8.4
8.6
8.8
9
Interest Spread

10. Ratios
Net Profit Margin
• Net profit margin is the ratio of net profits to revenues for a company or business segment
• Net profit margin indicates a business's financial health
• Business can use its net profit margin to forecast profits based on revenues.
The fall in this margin indicates that the
bank is making some decisions which are
lowering the profits.
Mar
'12
Mar
'13
Mar
'14
Mar '15 Mar '16
Profit Margin 18.93 19.18 20.61 21.07 20.41
18.93
19.18
20.61
21.07
20.41
17.5
18
18.5
19
19.5
20
20.5
21
21.5
Profit Margin

11. Ratios
Return on Equity
• Return on equity (ROE) is the amount of net income returned as a percentage
of shareholders equity.
• The ROE is useful for comparing the profitability of a company to that of other firms in
the same industry.
The fall from 2014-2015 indicates how the
investors had lost faith in the bank. Now
the rise has indicated more profitability for
the banks
Mar '12
Mar
'13
Mar
'14
Mar '15 Mar '16
Return on Equity 17.26 18.57 19.5 16.47 16.91
17.26
18.57
19.5
16.47
16.91
14.5
15
15.5
16
16.5
17
17.5
18
18.5
19
19.5
20
Return on Equity

12. Ratios
Credit deposit ratio
• It is the ratio of how much a bank lends out of the deposits it has mobilized.
• A higher ratio indicates more reliance on deposits for lending and vice-versa.
The credit deposit ratio is high which
indicates that HDFC bank is more reliance
on deposits for lending.
Mar
'12
Mar
'13
Mar '14 Mar '15 Mar '16
Series1 78.06 80.14 81.79 81.71 83.24
78.06
80.14
81.79 81.71
83.24
75
76
77
78
79
80
81
82
83
84
Credit deposit ratio

13. Ratios
Loan-to-deposit ratio (LTD)
• The loan-to-deposit ratio (LTD) is used for assessing a bank's liquidity
• If the ratio is too high, it means that the bank may not have enough liquidity
• Conversely, if the ratio is too low, the bank may not be earning as much as it could be.
The ratio is not too high and not too low,
putting the bank in a comfortable position
Mar
'12
Mar
'13
Mar
'14
Mar '15 Mar '16
Series1 36.99 38.51 35.05 35.13 33.13
36.99
38.51
35.05 35.13
33.13
30
31
32
33
34
35
36
37
38
39
LTD

14. Ratios
Earnings per share (EPS)
• It the portion of a company's profit allocated to each outstanding share of common stock.
• Earnings per share serves as an indicator of a company's profitability..
• High-quality EPS means that the number is a relatively true representation of what the
company actually earned
• A low-quality EPS number does not accurately portray what the company earned
HDFC bank has continuously increased
from year 2012 to year 2016 which shows a
positive impact of decisions taken by the
management
1 2 3 4 5
22.11 28.49 35.47 42.15 48.84
22.11
28.49
35.47
42.15
48.84
0
10
20
30
40
50
60

15. Ratios
TOTAL DEBT TO OWNERS FUND
• A measurement of a company’s financial leverage
• Calculated as the company’s debt divided by its total capital.
• A lower debt to equity ratio usually implies a more financially stable business.
• Companies with a higher debt to equity ratio are considered more risky to creditors and investors
As per the given data in the previous years
2012 and 2013 debt to equity ratio was more
stable as compared to later years 2014 and
2015 where either it was extremely high or
low which are both considered as risky
condition
1 2 3 4 5
Series1 9.04 9.09 9.36 8 8.25
9.04 9.09
9.36
8
8.25
7
7.5
8
8.5
9
9.5