HDFC BANK vs AXIS BANK
HOW DO THEY COMPARE
AFTER Q2 FY2011 PERFORMANCE
It is always interesting to compare the 2 (out of 3) top fastest growing private Banks in India, namely HDFC Bank and Axis Bank.
In columns 2 and 5 of the table below are numbers of Q2 performance of both the Banks. The diff%1 in each case is with reference to its respective previous quarters (Q1) and the dif%2 is with reference to respective corresponding Qtrs (Q2 FY2010).
The last column is the percentage difference between the Q2 numbers of HDFC Bank and Axis Bank.
Interest on Advances :
HDFC Bank’s Q2 is Rs.3673.18 Cr and its improvement over previous qtr is 10.95% and over corresponding Qtr is 22.02%.
Axis Bank’s Q2 is Rs.2429.03 cr and its improvement over previous Qtr is 5.11% and over corresponding Qtr is 24.55%.
HDFC has an edge of 51.22 % on Axis numbers in Q2 in respect of interest on Advances.
Interest Earned:
HDFC Bank’s Q2 is Rs.4810 cr – which is more by 8.82% over previous Qtr and 20.49% over corresponding Qtr.
Axis Bank’s Q2 is Rs.3624.25 cr – which is more by 8.98% over previous Qtr and 26.71% over corresponding qtr.
Axis has reduced the edge of HDFC Bank at this level to 32.72% - primarily on higher investment income and income from balances with RBI etc.
Total Income:
HDFC Bank’s Q2 is Rs.5770.70 cr which is higher by 7.66% on previous Qtr and 15.43% on corresponding Qtr.
Axis Bank’s Q2 is Rs.4657.49 Cr, which is higher by 7.65% over previous qtr and 18.63% over corresponding Qtr.
At this level, Axis has further reduced the Edge of HDFC Bank to just 23.9% - because of higher other income. So, as we can see, Axis is scoring in income from investments, income from balances with RBIs etc, and other Income, whereas, HDFC Bank is scoring well in respect of Interest on Advances.
Interest Expended:
HDFC Bank’s Q2 is Rs.2283.72 Cr – higher by 13.11% over previous Qtr and by 12.16% over corresponding Qtr.
Axis Bank’s Q2 is Rs.2009.15 cr – higher by 10.89% over previous Qtr and by 17.45% over corresponding Qtr.
Axis Bank has a clear edge of 13.67% in respect of lower interest expended compared to HDFC Bank.
Employees Cost:
HDFC Bank’s Q2 is Rs.710.57 – more by 6.52% over Pre.Qtr and by 28.24% over corresponding Qtr.
Axis Bank’s Q2 is Rs.405.30 Cr – down by 2.67% over Pre.Qtr and higher by 33.23% over corresponding Qtr.
In this expense item also, Axis has a huge edge of 75.32% over HDFC Bank.
Other Operating Expenses:
HDFC Bank’s Q2 is Rs.969.31 Cr – up by 4.76% over Pre Qtr and by 18.78% over corresponding Qtr.
Axis’s Q2 is Rs.756.69 Cr – up by 16.76% over pre.Qtr and by 25.01% over corresponding Qtr.
Axis has an edge of 28.1% over HDFC Bank in this item of expense.
Operating Expenses :
HDFC Bank’s Q2 is Rs.1679.88 cr – higher by 5.5% over Pre Qtr and by 22.6% over corresponding Qtr.
Axis’s Q2 is Rs.1161.99 cr – higher by 9.16% over Pre Qtr and by 27.76% over corresponding Qtr.
In this Expense item also, Axis has an edge of 44.57% over HDFC Bank.
Operating Profit:
HDFC Bank’s Q2 is Rs.1807.10 cr – higher by 3.34% over Pre Qtr and by 13.44% over corresponding Qtr.
Axis’s Q2 is Rs.1486.35 cr – higher by 2.5% over Pre Qtr and by13.83% over corresponding Qtr.
HDFC Bank has an edge of 21.58% over Axis at OPT level.
Provisions :
HDFC Bank’s Q2 is Rs.454.48 cr – down by 18.11% over Pre Qtr and down by 23.51% over corresponding Qtr.
Axis’s Q2 is Rs.378.76 Cr – up by 13.74% over Pre Qtr but down by 24.08% over corresponding Qtr.
HDFC Bank’s provisions are higher by 19.99% compared to Axis Bank.
Tax Expense:
HDFC Bank’s Q2 is Rs.440.48 – up by 15.31% over pre qtr and by 41.45% over corresponding qtr.
Axis’s q2 is Rs.372.45 – down by 0.73% over Pre qtr and by 35.33% over corresponding Qtr.
HDFC Bank pays more tax by 18.27% - compared to Axis Bank
Net Profit:
HDFC Bank’s Q2 is Rs.912.14 cr – up by 12.37% over Pre Qtr and by 32.68% over corresponding Qtr.
Axis’s Q2 is Rs.735.14 cr – down by 0.91% from Pre Qtr but up by 38.28% from corresponding Qtr.
HDFC Bank has 24.08% more in net profit level over Axis Bank.
Paid-up Equity:
HDFC Bank’s equity is Rs.462.60 cr while Axis has Rs.408.84 cr and HDFC Bank has 13.15% more of equity.
Capital Adequacy Ratio:
HDFC Bank’s CAR is 17 against Axis Bank’s 13.68 – which gives HDFC Bank an edge of 24.27%.
Basic EPS :
HDFC Bank has a Basic EPS of Rs.19.8 against Axis Bank’s Rs.18.01 - more by 9.94% over Axis Bank. At this crucial level, Axis Bank has closed the performance Gap considerably.
% of Gross/Net NPA
HDFC Bank’s Q2 is 0.3 and Axis Bank’s Q2 also is 0.34 which is very close for both.
Return on Assets:
HDFC Bank has a very low return on assets of 0.4 against 1.5 for Axis Bank. Axis Bank scores hands down in this respect.
Market Price and PE Ratio :
The Market Price of HDFC Bank is Rs.2343.Its Q2 EPS is Rs.19.8. Annualising this EPS ( x 4) the annual EPS is around Rs.79.2. The PE Ratio on this Basis is 29.58.
The Market price of Axis Bank is Rs.1465.Its Q2 EPS is Rs.18.01. Annualising this EPS ( x 4) the annual EPS is around Rs. 72.04. The PE Ratio on this basis is 20.34.
While HDFC Bank may quote at a premium over Axis based on size, yet, Axis Bank appears to be quite underpriced for its growth rates at this point of time.
Results in numbers :
| HDFC BANK | HDFC BANK Q2 | DIF%1 | DIF%2 | AXIS BANK Q2 | Dif%1 | Dif%2 | HDFC - AXIS % |
| Interest on Advances | 367318 | 10.95 | 22.02 | 242903 | 5.11 | 24.55 | 51.22 |
| Income on Investments | 110026 | 4.47 | 14.66 | 112354 | 20.13 | 30.71 | -2.07 |
| Income on Balances With RBI | 3546 | -16.11 | 67.82 | 3837 | 18.13 | 27.81 | -7.58 |
| Others | 110 | -92.22 | 14.58 | 3331 | -29.07 | 61.78 | -96.7 |
| Interest Earned | 481000 | 8.82 | 20.49 | 362425 | 8.98 | 26.71 | 32.72 |
| Other Income | 96070 | 2.22 | -4.64 | 103324 | 3.24 | -3.03 | -7.02 |
| Total Income | 577070 | 7.66 | 15.43 | 465749 | 7.65 | 18.63 | 23.9 |
| Interest Expended | 228372 | 13.11 | 12.16 | 200915 | 10.89 | 17.45 | 13.67 |
| Employees Cost | 71057 | 6.52 | 28.24 | 40530 | -2.67 | 33.23 | 75.32 |
| Other Operatg Expenses | 96931 | 4.76 | 18.78 | 75669 | 16.76 | 25.01 | 28.1 |
| Operatg Expenses | 167988 | 5.5 | 22.6 | 116199 | 9.16 | 27.76 | 44.57 |
| Operating Profit | 180710 | 3.34 | 13.44 | 148635 | 2.5 | 13.83 | 21.58 |
| Provisions | 45448 | -18.11 | -23.51 | 37876 | 13.74 | -24.08 | 19.99 |
| Profit before tax | 135262 | 13.31 | 35.42 | 110759 | -0.85 | 37.27 | 22.12 |
| Tax Expense | 44048 | 15.31 | 41.45 | 37245 | -0.73 | 35.33 | 18.27 |
| Net Profit After Tax | 91214 | 12.37 | 32.68 | 73514 | -0.91 | 38.28 | 24.08 |
| Net Profit | 91214 | 12.37 | 32.68 | 73514 | -0.91 | 38.28 | 24.08 |
| Face Value of Share.Rs. | 10 | 0 | 0 | 10 | 0 | 0 | 0 |
| Paid-up Equity | 46260 | 0.63 | 8.25 | 40884 | 0.34 | 1.71 | 13.15 |
| Capital Adequacy Ratio | 17 | 4.29 | 8.28 | 13.68 | -5.91 | -16.94 | 24.27 |
| Basic EPS B EI | 19.8 | 11.86 | 22.98 | 18.01 | -1.37 | 23.02 | 9.94 |
| Diluted EPS B EI | 19.5 | 12.07 | 22.64 | 17.72 | -1.28 | 23.23 | 10.05 |
| Gross/Net NPA | 40854 | -0.96 | -32.18 | 1.5 | -7.98 | 3.45 | 2723500 |
| % of Gross/Net NPA | 0.3 | 0 | -40 | 0.34 | -2.86 | -24.44 | -11.76 |
| Return on Assets | 0.4 | 0 | 0 | 1.5 | -7.98 | 3.45 | -73.33 |
| Public holding (%) | 59 | -22.77 | -26.89 | 53.82 | -1.27 | 1.11 | 9.62 |
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