HDFC BANK = VS= AXIS BANK = RESULTS OF Q2 FY 2012 = Q/E SEP,2011 = HOW DO THEY COMPARE?

HDFC BANK vs AXIS BANK

Q2 FY 2012 RESULTS

Q/E SEP,2011 - Comparison

HDFC BANK and AXIS BANK are both star Performers in the Private sector Banks category. They are also extremely consistent performers for the last several Years. So, how do they compare in their latest performance in the second quarter of FY 2012 ending Sep,2011?

Let us make a comparison of some of the important parameters. We will compare each bank on (i) the performance in Q2 FY 12, (ii) rate of increase from preceding Qtr of Q1 FY 12 and (iii) rate of increase from corresponding Qtr of Q2 FY 11.

Interest on Advances : HDFC Bank has clocked Rs.4994.79 cr with a 10.65% rise from preceding Qtr and 35.98% rise from corresponding Qtr. Axis Bank has clocked Rs.3687.82 Cr – with a rise of        6.27% from preceding Qtr and 51.82% rise from corresponding Qtr. As of now – HDFC Bank is bigger in size, but, Axis is obviously closing the Gap steadily.

Income on Investments : HDFC Bank has clocked Rs.1618.19 cr – up by 14.71 % from previous Qtr and 47.07% from corresponding Qtr. Axis Bank has clocked Rs.1548.64 Cr – up by 16.19% from previous qtr and 37.84% from corresponding Qtr.

Interest Earned : HDFC Bank has clocked Rs.6717.70 cr – up by 12.37% from previous qtr and up by 39.66% from corresponding Qtr. Axis Bank has clocked Rs.5275.97 cr – up by 8.08% from previous qtr and up by 45.57% from corresponding qtr.

Other Income : HDFC has clocked Rs.1211.68 Cr – up by 8.18% from previous qtr and up by        26.12% from corresponding qtr. Axis bank has clocked Rs.1234.92 cr – up by 5.74% from previous Qtr and 19.52% from corresponding Qtr.

Total Income : HDFC Bank has clocked  Rs.7929.38 cr – up by 11.71% from previous qtr and  up by 37.41% from corresponding qtr. Axis Bank has clocked Rs.   6510.89 Cr – up by 7.63% from previous qtr and up by  39.79% from corresponding qtr.

Interest Expended : HDFC Bank has clocked Rs.3773.19 cr – up by 20.55% from previous Qtr and up by 65.22% from corresponding Qtr. Axis Bank has clocked Rs.3268.71 cr – up by 3.53% from previous qtr and up by 62.69% from corresponding Qtr.

Net Interest Income comes to Rs.2944.51 Cr for HDFC Bank (for Q2 FY 12) and Rs.2007.26 Cr for Axis Bank .        In NII, Axis is slowly closing the gap. Axis Bank says – it has posted a NIM of 3.78% during Q2FY12, compared to 3.68% during Q2FY11 and 3.28% during Q1FY12, which is quite healthy.

Total Expenditure        : HDFC Bank has clocked Rs.5803.58 cr – up by 14.59% from previous Qtr and up by 46.42% from corresponding Qtr. Axis Bank has clocked Rs.        4735.25 cr – up by 5.44% from previous qtr and up by 49.32% from corresponding qtr. Overall, we find that the ratio between sales and expenditure is same for both Banks.

Operating Profit   comes to Rs.2125.80 cr for HDFC Bank – up by 4.55% from previous qtr and up by 17.64% from corresponding qtr. For Axis Bank, the same is Rs.1775.64 cr – up by 13.93% from previous qtr and up by 19.46% from corresponding qtr. There is good increase for both Banks at this stage.

Provisions : HDFC Bank made provisions for Rs.366.05 cr down by -17.49% from previous qtr and down by -19.46% from corresponding qtr. For Axis bank, provisions stands higher at 405.58 Cr – up by         130.65% from previous qtr and up by 7.08% from corresponding qtr. It is in Provisions – that Axis Bank has slightly suffered compared to HDFC Bank in this qtr. In earlier qtrs, Axis had shown good grip on Provisions.

Profit before tax comes to Rs.        1759.75 cr for HDFC Bank , up by 10.7% from previous qtr and up by 30.1% from corresponding qtr. For Axis Bank, the same is Rs.1370.06 cr – down by -0.91% from previous qtr and up by 23.7% from corresponding qtr. The effect of higher provisions for Axis Bank reflects in lower PBT compared to previous qtr.

Tax Expense stands at Rs.560.40 cr for HDFC Bank – up by 11.03% from previous qtr and up by 27.22% from corresponding Qtr. For Axis Bank, the same is Rs.449.74 cr – up by 2.15% from previous qtr and up by 20.75% from corresponding Qtr.

Net Profit stands at Rs.1199.35 cr for HDFC Bank – up by 10.54% from previous qtr and up by 31.49% from corresponding qtr. For Axis Bank NPT stands at Rs.920.32 cr – down by -2.34% from previous qtr and up by 25.19% from corresponding qtr. HDFC Bank has shown healthy increase compared to previous and corresponding Qtrs. But, Axis Bank shows slightly lower profits compared to previous qtr though it has shown good increase compared to corresponding qtr. In any case, the effect of Higher provisions has pulled down Axis slightly in this qtr.

Capital Adequacy Ratio      stands at 16.5% fro HDFC Bank  and 11.35% for Axis Bank.

Basic EPS : For HDFC Bank, it stands at Rs.5.1 on a FV of Rs.2 or Rs.25.5 on FV of Rs.10; while for Axis Bank, the same is Rs.22.33 on a FV of Rs.10.

Gross/Net NPA stands lower for HDFC Bank at Rs.355.25 cr, while, the same for Axis Bank is Rs.548.77 Cr.

% of Gross/Net NPA stands at 0.2 for HDFC Bank and at 0.34 for Axis Bank.

Return on Assets stands at 0.4 for HDFC Bank and 1.52 for Axis bank.

PE RATIO for Axis Bank : The Annualised EPS can be around Rs.90. At current Market Price of Rs.854 ,the Price Earnings Ratio works out to just 9.49, which is very LOW – for such a star scrip. In a normal market, Axis Bank can go much beyond its 52 week High Price.

PE RATIO FOR HDFC BANK :The annualized EPS can be around Rs.20-21 on FV of Rs.2. current MP is Rs.420 ; Hence, PE Ratio comes to  20. HDFC Bank has traditionally commanded higher PE Ratio than other Banks including Axis bank. And, its valuations reflected in the pE Ratio of 20 is well worth it.

However, Axis Bank also has been a star performer and very close to HDFC Bank. We can expect Axis bank to perform much better in coming quarters – and possibly close the gap between the two of them. There is no justification for such a low PE ratio of around 9.49 for Axis Bank, which indicates scope for huge appreciation in a Normal market.

Over all Both scrips are Great to hold in any one’s long term Portfolio.

       

COMPARISON TABLE

ITEM HDFC BK 30-09-2011 % DIF 1 % DIF 2 AXIS BK 30-09-2011 % DIF 1 % DIF 2 Interest on Advances 499479 10.65 35.98 368782 6.27 51.82 Income on Investments 161819 14.71 47.07 154864 16.19 37.84 Income on Balances With RBI 3294 32.61 -7.11 1117 -76.69 -70.89 Others 7178 154.18 6425.45 2834 -7.23 -14.92 Interest Earned 671770 12.37 39.66 527597 8.08 45.57 Other Income 121168 8.18 26.12 123492 5.74 19.52 Total Income 792938 11.71 37.41 651089 7.63 39.79 Interest Expended 377319 20.55 65.22 326871 3.53 62.69 NII 294451 200726 Employees Cost 82310 5.39 15.84 49862 -2.22 23.02 Other Operating Expenses 120729 4.65 24.55 96792 17.53 27.91 Operating Expenses 203039 4.95 20.87 146654 9.98 26.21 Total Expenditure 580358 14.59 46.42 473525 5.44 49.32 Operating Profit 212580 4.55 17.64 177564 13.93 19.46 Provisions 36605 -17.49 -19.46 40558 130.65 7.08 Profit before tax 175975 10.7 30.1 137006 -0.91 23.7 Tax Expense 56040 11.03 27.22 44974 2.15 20.75 Net Profit 119935 10.54 31.49 92032 -2.34 25.19 Face Value(in Rs.) 2 10 0 0 Paid-up Equity 46766 0.19 1.09 41233 0.11 0.85 Capital Adequacy Ratio 16.5 -2.37 -2.94 11.35 -9.42 -17.03 Basic EPS 5.1 -78.11 -74.24 22.33 -2.57 23.99 Diluted EPS 5.1 -77.83 -73.85 22.13 -2.38 24.89 Gross/Net NPA 35525 11.54 -13.04 54877 18.66 34.06 % of Gross/Net NPA 0.2 0 -33.33 0.34 9.68 0 Return on Assets 0.4 0 0 1.52 -5.59 1.33
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