HDFC BANK
VS
AXIS BANK
HOW PERFORMANCE COMPARES
IN Q3 FY 2011
Among the private sector Banks, two Banks stand out for their consistent performance over the last several years. One is HDFC Bank and the other is Axis Bank.
For the third quarter ending December,2010, their performance compares as below :
INTEREST ON ADVANCES : HDFC Bank is At Rs.3950 Cr – up from previous qtr by 7.55% and from corresponding quarter by 29.99%. Axis Bank is at Rs.2601 Cr – up by 7.06% from previous qtr and by 30.82% from corresponding quarter.
INCOME ON INVESTMENTS : is Rs.1226 cr for HDFC Bank up by 11.41% from previous qtr and by 25.06% from corresponding qtr. The same is Rs.1167 Cr for Axis Bank, up by 3.85% from previous qtr and by 38.02% from corresponding qtr.
TOTAL INCOME : is Rs.6358 Cr for HDFC Bank, up by 10.17% from previous qtr and by 30.07% from corresponding qtr. The same is Rs.4986 cr for Axis Bank, up by 7.05% from previous qtr and by 28.78% from corresponding qtr.
NET INTEREST INCOME : IS Rs.2777 Cr for HDFC Bank, up by 9.91% from previous qtr and by 24.86% from corresponding qtr. The same is Rs.1733 cr for Axis Bank, up by 7.31% from previous qtr and by 28.46% from corresponding qtr.
OPERATING PROFIT : is Rs.2073 cr for HDFC Bank, up by 14.7% from previous qtr and by 27.65% from corresponding qtr. The same is Rs.1658 Cr for Axis Bank, up by 11.58% from previous qtr and by 20.65% from corresponding qtr.
Provisions is Rs.465.87 cr for HDFC Bank compared to Rs.454.48 cr in previous qtr and Rs.447.72 cr in corresponding qtr. The same is Rs.313.88 cr for Axis Bank, compared to Rs.378.76 cr in previous qtr and Rs.373.14 cr in corresponding qtr.
NET PROFIT : IS Rs.1088 cr for HDFC Bank, up by 19.26% from previous qtr and by 32.91% from corresponding qtr. The same is Rs.891 cr for Axis Bank , up by 21.25% from previous qtr and by 35.88 Cr from corresponding qtr.
Capital Adequacy Ratio is 16.3 for HDFC Bank and 12.46 for Axis Bank.
Basic EPS is Rs.23.5 for HDFC Bank , up from Rs. 19.8 in previous qtr and Rs.18.7 in corresponding qtr. The EPS for Axis Bank is Rs.21.77, compared to Rs.18.01 in previous qtr and Rs.16.29 in corresponding qtr.
% of Gross/Net NPA is 0.2 for HDFC Bank and 0.29 for Axis Bank.
Return on Assets is 0.4 for HDFC Bank and 1.75 for Axis Bank.
Thus, in absolute performance levels, HDFC Bank maintains a slight advantage clocking an EPS of Rs.23.5 (annualized : Rs.94) against Axis Bank’s Rs.21.77(annualised :Rs.87.08). HDFC Bank is the older and bigger Bank of the two. Axis is however moving up fast and is the third largest Private Bank, after ICICI and HDFC Bank. In consistency of performance both are almost equal.
Their current market price levels are : HDFC Bank : Rs.2060: Axis Bank :Rs.1265.
Thus PE Ratio for HDFC Bank is :21.91; PE Ratio for Axis Bank is Rs.14.53.
Thus, At current price levels, Axis Bank appear to be very cheap compared to HDFC Bank and may deserve much better valuations. It can move up to higher levels at a more decent PE Ratio, for its highly consistent performance.
Both are making smart moves for Business and product expansion – which are likely to move them into top gear in coming quarters.
Over all - the Banking Sector has performed very well - both private and public - and both sectors deserve much higher valuations than at present.
RESULTS TABLE :
| ITEM | HDFC BK 12/31/2010 | HDFC BK 9/30/2010 | HDFC BK 12/31/2009 | AXIS 12/31/2010 | AXIS 9/30/2010 | AXIS 12/31/2009 |
| Interest on Advances | 395038 | 367318 | 303892 | 260055 | 242903 | 198788 |
| DIF %1 | 3950 | 7.55 | 29.99 | 2601 | 7.06 | 30.82 |
| Income on Investments | 122583 | 110026 | 98016 | 116683 | 112354 | 84543 |
| DIF %2 | 1226 | 11.41 | 25.06 | 1167 | 3.85 | 38.02 |
| Income on Balances With RBI | 5171 | 3546 | 1201 | 4818 | 3837 | 2735 |
| Others | 204 | 110 | 372 | 2275 | 3331 | 2299 |
| Interest Earned | 522996 | 481000 | 403481 | 383831 | 362425 | 288365 |
| Other Income | 112782 | 96070 | 85301 | 114771 | 103324 | 98809 |
| Total Income | 635778 | 577070 | 488782 | 498602 | 465749 | 387174 |
| DIF %3 | 6358 | 10.17 | 30.07 | 4986 | 7.05 | 28.78 |
| Interest Expended | 245327 | 228372 | 181090 | 210519 | 200915 | 153454 |
| NII | 277669 | 252628 | 222391 | 173312 | 161510 | 134911 |
| DIF %4 | 2777 | 9.91 | 24.86 | 1733 | 7.31 | 28.46 |
| Employees Cost | 72505 | 71057 | 57859 | 39616 | 40530 | 30854 |
| Other Operatng Expenses | 110677 | 96931 | 87463 | 82619 | 75669 | 65403 |
| Operatng Expenses | 183182 | 167988 | 145322 | 122235 | 116199 | 96257 |
| Operating Profit | 207269 | 180710 | 162370 | 165848 | 148635 | 137463 |
| | 2073 | 14.7 | 27.65 | 1658 | 11.58 | 20.65 |
| Provisions | 46587 | 45448 | 44772 | 31388 | 37876 | 37314 |
| Tax Expense | 51899 | 44048 | 35748 | 45324 | 37245 | 34551 |
| Net Profit | 108783 | 91214 | 81850 | 89136 | 73514 | 65598 |
| DIF %6 | 1088 | 19.26 | 32.91 | 891 | 21.25 | 35.88 |
| Face Value (in Rs.) | 10 | 10 | 10 | 10 | 10 | 10 |
| Capital Adequacy Ratio | 16.3 | 17 | 18.3 | 12.46 | 13.68 | 16.8 |
| Basic EPS | 23.5 | 19.8 | 18.7 | 21.77 | 18.01 | 16.29 |
| Diluted EPS | 23.1 | 19.5 | 18.4 | 21.44 | 17.72 | 15.98 |
| Gross/Net NPA | 33067 | 40854 | 54401 | 38554 | 40935 | 42955 |
| % of Gross/Net NPA | 0.2 | 0.3 | 0.5 | 0.29 | 0.34 | 0.46 |
| Return on Assets | 0.4 | 0.4 | 0.4 | 1.75 | 1.5 | 1.73 |
| Public holding (%) | 76.6 | 59 | 76.1 | 53.63 | 53.82 | 53.71 |
* * * E N D * * *
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