ANALYSIS OF PRIVATE SECTOR

BANKS
- INVESTOR’S PERSPECTIVE
 Why banking sector???
• Steady progress since 2002.
• Indian banking is unaffected from the global
financial crises
• Indian banking will adopt for more of
defensive approach & follow stringent norms
for credit disbursal.
• Indian banking focus on analyzing borrower
financial health rather than capability.
 Contd…
• Retail banking industry reached a value of $66
billion in 2005.
• In future the retail banking industry in India is
likely to reach a value of $300 billion by 2010.
• Sukhani told CNBC-TV18, "When the Nifty
started moving up after the Budget
announcement the banking sector
outperformed, it roared almost 6% while the
Nifty was underperforming
 GROUP 4

Introduction Monal Bhattad 5

HDFC Bank Nilesh Shingade 50
Akshada Wagh 57
Kotak Mahindra Bank Shailesh Gajare 13
Anjali Rodrigues 43
Axis Bank Ashutosh Rathod 40
Simeen Khalfay 21
HDFC Bank
 HDFC BANK
• Housing Development Finance Corporation

• Founded in 1977 by Hasmukh bhai Parakh

• HDFC Bank was incorporated in August 1994

• Certificate of Commencement of Business was received on 10th October

1994 from RBI

• Opened first Branch in Ramon House at Churchgate

• IPO in India in 1995

 Mission
• World Class Indian Bank

• Benchmarking against international standards.

• Best practices in terms of product offerings, technology,

service levels, risk management and audit & compliance.

• To build sound customer franchises across distinct

businesses.
BOARD OF DIRECTORS
Mr. Jagdish Kapoor , Chairman of HDFC Bank.

Mr. Aditya Puri, Managing Director

Mr. Harish Engineer,Executive Director

Mr. Parekh Sukthakar, Executive Director

TRULY GLOBAL !!!
 Capital Structure

• The authorized capital of HDFC Bank is Rs550 crore (Rs5.5 billion).

• The paid-up capital is Rs455.23 crore (Rs.4.2 billion).

• The HDFC Group holds 23.87% of the bank's equity

• 16.94 % of the equity is held by the ADS Depository (in respect of the
bank's American Depository Shares (ADS) Issue).

• Roughly 27.46% of the equity is held by Foreign Institutional Investors

(FIIs) and the bank has about 458683 shareholders
 Business Strategy
• Increasing market share in India’s expanding banking.

• Delivering high quality customer service.

• Delivering more products to more customers.

• Maintaining current high standards for asset quality through

disciplined credit risk management.

• Develop innovative products and services that attract targeted

customers and address inefficiencies in the Indian financial
sector.
NETWORK
• 1725 branches
• 4000 ATM’s in the country
• 771 cities in India
• All branches are OLRT
connected
• Customers in over 500
locations are also serviced
through Telephone Banking
• Representative offices in
Hong Kong, NewYork,
London & Singapore
 Achievements
• Merged with Centurion Bank of Punjab in 2008.

• Merged with TIMES BANK in 2000.

• HDFC Bank ties up with Qatar National Bank.

• Best Local Bank in India & Best Private Banking Services

overall –Euromoney Private Banking & Wealth Management
Poll 2010.
Growth by Acquisition !!
Enterprises under common control of the promoter

HDFC Asset Management Company Ltd.

HDFC Standard Life Insurance Company Ltd.
HDFC Developers Ltd.
HDFC Holdings Ltd.
HDFC Investments Ltd.
HDFC Trustee Company Ltd.
GRUH Finance Ltd.
HDFC Realty Ltd.
HDFC Ergo General Insurance Company Ltd. (formerly HDFC Chubb General
Insurance Company Ltd.)
HDFC Venture Capital Ltd.
HDFC Ventures Trustee Company Ltd.
HDFC Sales Pvt. Ltd. (formerly Home Loan Services India Pvt. Ltd.)
HDFC Property Ventures Ltd.
 HDFC Bank balance sheet
• Balance sheet

• Profit & Loss Statement

• Cash Flow Statement

 Director’s Report
• The Banks Fixed Deposit program has been
rated AAA by CARE, CRISIL, Fitch Ratings
India Private Limited
• 16.78 lacs shares were allotted to the
employees under the Employee Stock Option
Scheme of the Bank
 Auditor’s report
• The Auditors M/s. Haribhakti & Co
• No default on the part of the company interms
of payment of Taxes & providing dividend.
• The financial data furnished by the company is
authentic & true to their knowledge.
• The company operates on ethical grounds.
Percentage growth since April2009
69.81%
 Ratio Analysis
PER SHARE RATIOS 2009 2008 2007

Reported EPS (Rs) 52.77 44.87 35.74

Net operating income per share (Rs) 464.77 348.57 259.98

Gross profit margin (%) 18.05 28.58 30.50

Net profit margin (%) 11.35 12.82 13.57

Adjusted Net worth 15.29 13.82 17.75

Dividend pay out ratio 22.16 22.16 22.91

 Kotak Mahindra Bank
• The company was incorporated as Kotak
Capital Management Finance Ltd on 21st
November 1985.
• Promoters- Mr. Uday Kotak, Mr. Sidney Pinto
and Kotak & Company.
• Harish Mahindra and Anand Mahindra took a
stake in the company.
• The company’s name was change on 8th April,
1986 to Kotak Mahindra Finance Ltd.
• In 1987 company enters the Lease and Hire purchase
market
• In 1990 the company started auto finance division.
• In 1991 company started investment banking division.
• 1995- brokerage and distribution businesses : Kotak
Securities
• Investment banking division: Kotak Mahindra
Capital Company
• 1996- Auto finance business: Kotak Mahindra prime
Ltd
• In 1998 company entered into mutual fund
market with the launch of Kotak Mahindra
Asset Management Company.
• In 2000 Kotak securities launches its online
broking site (www.kotaksecurities.com)
• 2003 Kotak Mahindra Finance Ltd converted
to the commercial bank.
 Company profile

• Chairman K.M.Gherda
• Executive vice chairman Uday Kotak
& managing director
• Chairman of Board of Shankar Acharya
directors
• Registered office Nariman bhavan
Nariman point
Mumbai
• Employees base 8000+
• 5.9 million customers
• More than 217 branches
• Spread across 126 locations in the country
• Future Plans:-
• Setting up additional branches in major cities.
• Increase its market share in vehicle financing
business
Shareholding pattern as on
31/12/2009
No. of shares %
holding

Promoters holding
Indian Promoters 167845144 48.27

Non promoters holding

Banks Fin. Inst. And insurance 9028514 2.60
FII’s 100573927 28.93
Sub Total 33.70
Other Investors
Private corporate bodies 9560512 2.75
NRI’s/OCB’s/Foreign Others 4424575 1.27
Others 939045 0.27
Sub total 4.29
General Public 47756178 13.74
Grand total 347695925 100.00
 Rs Crore
Annual Results

Mar 09 08 07 06 05

• Sales 3065 2535 1354 694 420

• Operating profit 1614 1243 618 269 181

• Interest 1546 1309 699 339 94

• Gross Profit 679 669 325 210 33

• EPS (Rs) 7.99 8.53 4.33 3.82 6.88

 Kotak Mahindra Bank
• Balance Sheet
kotak\balance sheet.xls

• Profit and Loss Account

kotak\P& L Account.xls

• Cash Flow Statement

kotak\Cash Flow.xls
 Ratio Analysis
2009 2008 2007

Net operating income per share (Rs) 94.39 81.83 48.81

Operating margin (%) 13.85 19.93 14.54

Gross profit margin (%) 11.72 18.13 12.35

Net profit margin (%) 8.35 10.37 8.84

Adjusted return on net worth (%) 7.06 8.14 8.47

Dividend payout ratio (net profit) 10.07 10.29 18.91

 Highlights of the Director’s Report

• DIVIDEND
• The Directors recommend a dividend of Rs. 0.75 per share (previous
year Rs.0.75 per share), entailing a payout of Rs. 27.82 crore
including dividend
distribution tax
• Against the backdrop of the economic slowdown not only in India
but across the globe, the bank is moderating the network expansion
plans.
• Bank was ranked among the top five in Corporate Governance
Practices in Asia/Pacific in the IR Global Rankings 2009
 Auditors

• Messrs S.R. Batliboi & Co., Chartered Accountants –

Auditors for the annual year.
• The transactions of the Bank which have been conducted
within its powers;
• There has been no term loans availed during the year.
• The Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in agreement
with the books of account;
• The information provided by the bank gives a true and
fair view in conformity with the accounting principles
generally accepted in India;
AXIS BANK
 INTRODUCTION
• Public BSE.

• Previously called UTI bank ,was the 1st of the all new private
banks.

• The bank was promoted jointly by administrator.

• General insurance corporation ltd. ,National insurance

company ltd. ,The New India Assurance company. , The
Oriental insurance corporation.
• The UTI hold special position.

• The bank changed its name to Axis bank.

• SHIKHA SHARMA-April 2009.

• As on the year ended march,2009--13,745crores

-- 1,812crores.

• On Feb,2010-”AXIS CALL AND PAY ON ATOM”.

 PROMOTER OF AXIS BANK
• Axis bank has been promoted by largest financial institution.

• Set up with a capital of 115 crores.

• The Government of India has currently appointed shri.K.N.

Prithviraj.

• The government has continuing obligation and commitment to

the investor of Axis bank, which it will support to them.
 BOARD OF DIRECTOR
• Smt. Shikha sharma Managing Director
and CEO.
• Shri.M.N.Agarwal Deputy Managing
Director
• Shri.N.C.Singhal Director
 BRANCH NETWORK
• At the end of October 2009, the Bank has a very
wide network of more than 925 Branch offices
and Extension Counters.The Bank has a network
of over 3900 ATM's (as on 31st October 2009).

• The Bank has loans now (as of June 2007)

account for as much as 70 per cent of the bank’s
total loan book of Rs 2,00,000 crore.
 Axis Bank
• Balance Sheet of Axis Bank Ltd.doc

• Profit loss account of Axis Bank Ltd

 Cash Flow
  Mar ' 09 Mar ' 08 Mar ' 07
Profit before tax 2,785.19 1,646.27 996.24
Net cash flow from
10,551.63 5,960.45 5,295.53
operating activity

Net cash used in

-9,741.96 -4,702.52 -3,655.58
investing activity

Net cash generated

1,692.32 4,325.79 1,637.01
from financing activity

Net increase in cash

2,512.66 5,585.94 3,276.46
and equivalent

Cash and equivalnt

12,504.24 6,918.31 3,641.84
begin of year

Cash and equivalnt end

15,016.90 12,504.24 6,918.31
of year
 Annual results in brief

  Mar ' 09 Mar ' 08 Mar ' 07

Sales 10,835.48 7,005.31 4,560.40

Operating profit 7,037.59 4,270.75 2,979.45

Interest 7,149.27 4,419.96 2,993.32

Gross profit 3,724.88 2,225.92 1,362.60

EPS (Rs) 50.57 29.94 23.40

 Director’s Report Highlights
• Profit after tax up by 69.50% to Rs. 1815.36 crores

• Net interest income up by 42.58% to Rs. 3686.21 crores

• Fee & Other Income up 63.63% to Rs.2523.02 crores

• Earning per share increased from Rs. 32.15 to Rs. 50.61

• Proposed dividend up from 60% to 100%

 Auditor’s Report Highlights
• Audit has been conducted by S.R. Batliboi & Co. Chartered
Accountants

• The balance sheet and profit and loss account are drawn up in
conformity with Forms A and B (revised) of the Third
Schedule to the Banking Regulation Act, 1949, read with
Section 211 of the Companies Act, 1956.

• True and fair view in conformity with the accounting

principles generally accepted in India;
 Ratio Analysis
  2009 2008 2007

Reported EPS (Rs) 50.57 29.94 23.40

Net operating income per

377.46 244.63 193.93
share (Rs)

Operating margin (%) 22.13 23.25 21.84

Gross profit margin (%) 20.74 21.44 19.79

Net profit margin (%) 13.31 12.22 12.01

Adjusted return on net

17.85 12.38 19.45
worth (%)

Dividend payout ratio

23.16 23.49 22.57
(net profit)
Graphical Analysis
 Comparison
• BALANCE SHEET
• Profit & loss A/C
• Cash flow
 Value of investment????

INVESTED HDFC BANK KOTAK AXIS BANK

(Rs.) LTD. (Rs.) MAHINDRA LTD. (Rs.)
1 year ago BANK LTD.
(Rs.)

100 214.47 298.14 335.74

 REPORT CARD
KOTAK
HDFC BANK AXIS BANK
Attribute Date MAHINDRA
LTD. LTD.
BANK LTD.

PE ratio
17/03/10 34.24 95.50 22.66

EPS (Rs) Mar, 09 52.78 7.99 50.57

Dividend
payout ratio Mar,09 22.16 10.07 23.16
(np)

Face Value (Rs)   10 10 10

Net profit
Mar, 09 11.35 8.35 13.31
margin (%)
Last dividend
23/04/09 100 7.5 100
(%)

Return on
Mar, 09 15.32 7.06 17.77
average equity
 Expert comments..
• Buy Axis Bank at Rs 1080, says Technical Analyst, Ashwani
Gujral
• Gujral told CNBC-TV18, "Axis Bank is one of the strongest
private banks, much stronger than probably a Kotak or
Reliance Capital or any of those guys but it could decline
towards Rs 1,080 where it becomes a good buy.”
• He further added, “We could see much higher targets
probably closer to Rs 1,350 on Axis Bank because generally it
seems to be breaking away from the pack and whereas other
stocks are unable to breakout of their ranges, this stock
generally tends to make fresh intermediate highs more
often."