HDFC BANK

By: Kapil
Sharma
INTRODUCTION
HDFC Bank was incorporated in August 1994
Among the first in new generation commercial banks
Registered office in Mumbai, India
IPO in India in 1995
Listed in NSE, BSE, NYSE (ADR)
SWOT
STRENGTH
Superior customer service vs. competitors.

Good Brand Image

High degree of customer satisfaction.

 
Lower response time with efficient and effective
service.
WEAKNESSES

Customer service staff need training.

processes and systems, etc need to be streamlined.
. More lending to corporate sector as compared to
individuals.
•.

OPPORTUNITIES
Profit margins will be good.

Could extend to overseas broadly.

Increase in size of sector.

.
THREATS
Legislation could impact profitability.

Very high competition prevailing in the industry.

Lack of infrastructure in rural areas could constrain

investment.
PEST ANALYSIS
POLITICAL
Banking act 1949(code of conduct)

Rules of RBI-Indian Banking Association.

Restriction on mergers.
ECONOMIC
Money inflation and deflation
Industrial growth
Liberalization
Globalization
Capital market requirement
CRR and other rates.
SOCIAL
Banking habits of the people.

Income level is rising

Society and aspiration values.

TECHNICAL
Product innovation

Focus on increasing level of service by technical

advancement.
PORTER 5 FORCE MODEL
BARGAINING POWER OF SUPPLIER IS VERY LOW
Nature of suppliers

Suppliers are not concentrated.

BARRIERS TO ENTRY 
Product differentiation very difficult

Licensing requirement
THREAT FROM COMPETITORS
Large no of banks
High market growth rate
Low switching costs
Undifferentiated services
High exit barriers
THREAT OF SUBSITUTUTES
Non banking financial sector increasing rapidly

Micro finance

Stock Market
 
BARGAINING POWER OF CONSUMERS IS VERY
HIGH.
Large no. of alternatives
Low switching costs
Undifferentiated services
Full information about the market
 
MARKETING
PRODUCT SCOPE
Accounts and deposits.
Loans.
Investments and Insurance.
Forex and payment services.
Cards.
Customer center
PRODUCT LIFE CYCLE
GROWTH-Home Equity loans.

MATURITY-Auto loans.

Decline-variable rate loans.

4Ps for HDFC
PRODUCT-
Different fixed deposit schemes.
Fixed and variable rate loan schemes.
Internet based banking.
Merchant banking services.
PLACE
Strong presence all over country.
Starting to expand to villages.

PRICE
Depends on rates charged by RBI.
Interest charged by competitors.
Organization structure of HDFC
CEO-DEEPAK PAREKH
Managing Director Director
Aditya puri A.Roy
Chairman of the Board Director
C. Vasudev Pandit Palande
Director Head, Treasury
Rennu karnad Head operations
Director Head Wholesale Banking
AshimDirector Head branch banking
Keki mistry Head retail asset
Director Head audit compliance
Partho Datta Head merchant banking
HR Country Head-Mandeep Maitra
Number of Employees-15000 approx.
Function of HR Department.
HDFC Human Resources perform the following
functions:-
Hiring
Promotions
Salary determination
Performance appraisal review and processing
Personnel data entry and records maintenance
Work permitting immigration visa program
Workers’ compensation
Strategy followed by the Bank
Increase market share in India’s expanding
banking and financial services industry by following
a disciplined growth . 
Strategy focusing on quality and delivering high
quality customer service.
Leverage our technology platform and open scalable
systems to deliver more products to more customers
and to control operating costs.
Develop innovative products and services that
attract the Targeted customers and address
inefficiencies in the Indian financial sector.

Continue to develop products and services that reduce

bank’s cost of funds.

Focus on high earnings growth with low volatility.

FINANCE
RATIO 2008 2009
GROSS PROFIT RATIO 12.82 11.35
NET PROFIT MARGIN 12.82 11.35
ASSET TURNOVER 1.2 1.3
RATIO
CURRENT RATIO 0.04 0.04
ROCE 11.05 12.5

MARKET CAP-
109610.49cr.
NET PROFIT RATIO
PAT/SALES
The net profit margin stands at 11.35 because of heavy
administration expenses which are more than 25% of
sales as it is employing more than 15000 people .it
quite close industry average
ASSET TURNOVER RATIO
NET INCOME/TOTAL ASSETS
Assets turnover ratio stands at 1.3 the reason for low
asset turnover ratio is the value of denominator is very
high as bank requires to hold with itself huge amount
of reserves and funds.
CURRENT RATIO
CURRENT ASSETS/CURRENT LIABILITIES
Current ratio stands at 0.04.Current ratio tells us how
many times current assets are of current liabilities low
current asset ratio means company is lending most of
the cash available with it. It is tradeoff the bank does
between profitability and liquidity.
ROCE
NET INCOME/CAPITAL EMPLOYED
It determines how well company is able generate revenue
from its capital base. It stands at 12.5% which is a
healthy sign as it is more than cost of borrowing.