SUMMER INTERSHIP PROGRAM

On
A STUDY ON FINANCIAL ANALYSIS OF HDFC BANK

(Report Submitted in Partial Fulfilment of Requirements for the degree of Master of

Business Administration in JNTU Hyderabad)

Submitted by
RANU SINGHAL
Roll No: 22R01E0120
MBA II year I sem
Under the esteemed guidance of
UMAMAHESWARARAO GOBBILLA
Associate Professor & Head

Department of Management Studies (MBA)

CMR INSTITUTE OF TECHNOLOGY

UGC Autonomous
(Approved by AICTE, Permanently Affiliated to JNTUH, Hyderabad, NBA Accredited and
NAAC with “A” grade)
Kandlakoya (V), Medchal Road, Hyderabad – 501401

Academic Year (2023-2024)

1
 INDEX

CHAPTER NO PARTICULARS PAGE NO.

1 COMPANY ANALYSIS 3 - 13

INTRODUCTION
MISSION & VISION
BALANCE SHEET

2 INDUSTRIAL ANALYSIS 14
14-21
- 20

3 MARKET 22-24
21 - 23
ANALYSIS

4 COMPETITOR 25-31
24 - 29
ANALYSIS

5 FINDINGS AND 30 - 31
32-33
CONCLUSION

2
 CHAPTER 1
COMPANY ANALYSIS
INTRODUCTION

HDFC BANK LTD was incorporated in August 1994 in the name of 'HDFC Bank Limited',
with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995.

If ever there was a man with a mission it was Hasmukh Bhai Parekh, Founder and
Chairman-Emeritus, of HDFC Group. HDFC BANK LTD was amongst the first to set up
a bank in the private sector. The bank was incorporated on 30th August 1994 in the name of
‘HDFC Bank Limited’, with its registered office in Mumbai. It commenced operations as a
Scheduled Commercial Bank on 16th January 1995. The bank has grown consistently and is
now amongst the leading players in the industry.

HDFC is India's premier housing finance company and enjoys an impeccable record of
accomplishment in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to remain the
market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling
units.

HDFC has developed significant expertise in retail mortgage loans to different market
segments and has a large corporate client base for its housing-related credit facilities. With its
experience in the financial markets, a strong market reputation, large shareholder base and
unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian
environment in a milestone transaction in the Indian banking industry, Times Bank was merged
with HDFC Bank Ltd., effective February 26, 2000.

3
 MISSION
I. World Class Indian Bank
II. Benchmarking against international standards.
III. To build sound customer franchises across distinct businesses
IV. Best practices in terms of product offerings, technology, service levels, risk
management and audit & compliance

VISSION
The HDFC Bank is committed to maintaining the highest level of ethical standards,
professional integrity, and regulatory compliance. HDFC Bank’s business philosophy is
based on four core values such as: -
1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the HDFC Bank is to provide its target market customers with a full range
of financial products and banking services, giving the customer a one-step window for all
his/her requirements. The HDFC Bank plus and the investment advisory services programs
have been designed keeping in mind the needs of customers who seek distinct financial
solutions, information, and advice on various investment avenues.

BUSINESS STRATEGY
1. Increasing market share in India’s expanding banking
2. Delivering high quality customer service

4
 3. Maintaining current exacting standards for asset quality through disciplined credit risk
management
4. Develop innovative products and services that attract targeted customers and address
inefficiencies in the Indian financial sector

PRODUCT & SERVICES

5
COMPETITORS
• ICICI bank
• AXIS bank
• Federal bank
• Bank of America
• IndusInd bank
• Kotak Mahindra bank
• State bank of India
• Union bank
• Uco bank
• Punjab national bank

6
BALANCE SHEET OF HDFC BANK (2021 to 2023)
HDFC Bank Previous Years »
Standalone Balance Sheet ------------------- in Rs. Cr. -------------------
Mar 23 Mar 23 Mar 22 Mar 22 Mar 21

12 MThs 12 MThs 12 MThs 12 MThs 12 MThs

EQUITIES AND
LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share
557.97 557.97 554.55 554.55 551.28
Capital
Total Share
557.97 557.97 554.55 554.55 551.28
Capital
Reserves and
279,641.03 279,641.05 239,538.38 239,538.38 203,169.55
Surplus
Total Reserves
279,641.03 279,641.05 239,538.38 239,538.38 203,169.55
and Surplus
Total
Shareholders' 280,199.01 280,199.02 240,092.94 240,092.93 203,720.83
Funds
Deposits 1,883,394.65 1,883,394.65 1,559,217.44 1,559,217.44 1,335,060.22
Borrowings 206,765.57 206,765.56 184,817.21 184,817.21 135,487.32
Other
Liabilities and 95,722.25 95,722.25 84,407.46 84,407.49 72,602.15
Provisions
Total Capital
2,466,081.47 2,466,081.48 2,068,535.05 2,068,535.07 1,746,870.52
and Liabilities
ASSETS
Cash and
Balances with
117,160.77 117,160.77 129,995.64 129,995.64 97,340.74
Reserve Bank
of India
Balances with
Banks Money
76,604.31 76,604.31 22,331.29 22,331.30 22,129.66
at Call and
Short Notice
Investments 517,001.43 517,001.43 455,535.69 455,535.70 443,728.29
Advances 1,600,585.90 1,600,585.90 1,368,820.93 1,368,820.93 1,132,836.63
Fixed Assets 8,016.54 8,016.55 6,083.67 6,083.68 4,909.32

7
Other Assets 146,712.52 146,712.52 85,767.83 85,767.82 45,925.89
Total Assets 2,466,081.47 2,466,081.48 2,068,535.05 2,068,535.07 1,746,870.52
OTHER ADDITIONAL
INFORMATION
Number of
7,821.00 0.00 6,342.00 0.00 5,608.00
Branches

173,222.00 0.00 141,579.00 0.00 120,093.00

Number of
Employees
Capital
Adequacy 19.26 19.26 18.90 18.90 18.79
Ratios (%)
KEY PERFORMANCE
INDICATORS
Tier 1 (%) 17.13 0.00 17.87 0.00 17.56
Tier 2 (%) 2.13 0.00 1.03 0.00 1.23
ASSETS QUALITY
Gross NPA 18,019.03 18,019.03 16,140.96 16,140.96 15,086.00
Gross NPA
1.12 1.00 1.00 1.00 1.00
(%)
Net NPA 4,368.43 4,368.43 4,407.68 4,407.68 4,554.82
Net NPA (%) 0.27 0.27 0.32 0.32 0.40
Net NPA To
0.27 2.00 0.00 2.00 0.00
Advances (%)
CONTINGENT
LIABILITIES,
COMMITMENTS
Bills for
71,439.54 0.00 56,968.05 0.00 44,748.14
Collection
Contingent
1,748,130.32 0.00 1,395,442.30 0.00 971,097.60
Liabilities

Source: Dion Global Solutions Limited

8
PROFIT & LOSS STATMENT (2021-2023)
HDFC Bank Previous Years »
Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------
Mar 23 Mar 22 Mar 21 Mar 20 Mar 19

12 MThs 12 MThs 12 MThs 12 MThs 12 MThs

INCOME
Interest / Discount
on Advances / 127,095.86 98,512.02 94,834.54 91,787.88 77,544.19
Bills
Income from
31,311.16 26,046.13 23,214.27 20,633.32 19,997.46
Investments
Interest on
Balance with RBI
996.79 2,552.37 2,341.25 1,828.93 635.70
and Other Inter-
Bank funds
Others 2,181.74 642.59 468.17 562.52 794.70
Total Interest
161,585.54 127,753.12 120,858.23 114,812.65 98,972.05
Earned
Other Income 31,214.83 29,509.90 25,204.89 23,260.82 17,625.88
Total Income 192,800.36 157,263.02 146,063.12 138,073.47 116,597.94

EXPENDITURE

Interest Expended 74,743.32 55,743.53 55,978.66 58,626.40 50,728.83

Payments to and
Provisions for 15,512.36 12,031.69 10,364.79 9,525.67 7,761.76
Employees
Depreciation 2,242.48 1,599.80 1,302.41 1,195.85 1,140.10
Operating
Expenses
(excludes 29,897.24 23,810.70 21,055.42 19,976.01 17,217.51
Employee Cost &
Depreciation)
Total Operating
47,652.08 37,442.19 32,722.63 30,697.53 26,119.37
Expenses
Provision
Towards Income 14,596.28 13,346.03 11,644.77 9,833.15 12,129.61
Tax
Provision
Towards Deferred -219.68 -1,291.91 -1,102.31 516.69 -1,008.12
Tax
Other Provisions
and 11,919.66 15,061.83 15,702.85 12,142.39 7,550.08
Contingencies

9
Total Provisions
and 26,296.26 27,115.95 26,245.31 22,492.23 18,671.57
Contingencies
Total
148,691.66 120,301.66 114,946.59 111,816.15 95,519.77
Expenditure

44,108.70 36,961.36 31,116.53 26,257.32 21,078.17

Net Profit / Loss
for The Year
Net Profit / Loss
After EI & Prior 44,108.70 36,961.36 31,116.53 26,257.32 21,078.17
Year Items
Profit / Loss
93,185.67 73,652.79 57,492.40 49,223.30 40,453.42
Brought Forward
Total Profit /
Loss available
137,294.38 110,614.15 88,608.93 75,480.62 61,531.58
for
Appropriations
APPROPRIATIONS
Transfer To /
From Statutory 11,027.18 9,240.34 7,779.13 6,564.33 5,269.54
Reserve
Transfer To /
From Special 500.00 0.00 0.00 0.00 0.00
Reserve
Transfer To /
From Capital 4.61 666.47 2,291.68 1,123.85 105.34
Reserve
Transfer To /
From General 4,410.87 3,696.14 3,111.65 2,625.73 2,107.82
Reserve
Transfer To /
From Investment -212.80 233.13 1,773.66 1,134.00 773.00
Reserve
Dividend and
Dividend Tax for
8,604.52 3,592.40 0.00 0.00 0.00
The Previous
Year
Equity Share
0.00 0.00 0.00 6,540.31 4,052.59
Dividend
Balance Carried
Over to Balance 112,960.00 93,185.67 73,652.79 57,492.40 49,223.30
Sheet
Total
137,294.38 110,614.15 88,608.93 75,480.62 61,531.58
Appropriations
OTHER INFORMATION

EARNINGS PER SHARE

Basic EPS (Rs.) 79.25 66.80 56.58 48.01 78.65

Diluted EPS (Rs.) 78.89 66.35 56.32 47.66 77.87

10
CASH FLOW (2021-2023)
HDFC Bank Previous Years »
Cash Flow ------------------- in Rs. Cr. -------------------
Mar 23 Mar 23 Mar 22 Mar 22 Mar 21

12 MThs 12 MThs 12 MThs 12 MThs 12 MThs

Net
Profit/Loss
Before
0.00 58,485.30 49,015.48 0.00 41,658.98
Extraordinar
y Items and
Tax
Net Cashflow
from
0.00 27,313.41 -14,208.72 0.00 41,494.79
Operating
Activities
Net Cash Used
in Investing 0.00 -2,428.88 -1,291.60 0.00 -1,120.17
Activities
Net Cash Used
from
0.00 16,121.92 48,191.75 0.00 -7,381.11
Financing
Activities
Foreign
Exchange 0.00 431.71 165.10 0.00 -141.83
Gains / Losses
Net Inc/Dec in
Cash and
0.00 41,438.16 32,856.53 0.00 32,851.68
Cash
Equivalents
Cash And Cash
Equivalents 0.00 152,326.92 119,470.40 0.00 86,618.72
Begin of Year
Cash And Cash
Equivalents 0.00 193,765.08 152,326.92 0.00 119,470.40
End of Year
.

11
HDFC Bank Ltd. Company Financial Ratios Analysis

67

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13
 CHAPTER 2

INDUSTRY ANALYSIS
HDFC Bank Limited Porter Five Forces Analysis For financial industry

Porter Five Forces Analysis is a strategic management tool to analyze industry and understand
underlying profitability levers in an industry. HDFC Bank Limited managers can use Porter
Five Forces to understand how the five competitive forces influence profitability and develop
a strategy for enhancing HDFC Bank Limited competitive advantage and long-term
profitability in Foreign Regional Banks industry.
HDFC Bank Limited is one of the leading firms in the Foreign Regional Banks. Over the years
HDFC Bank Limited has redefined the ways of doing business in Financial. HDFC Bank
Limited is listed at New York Stock Exchange (NYSE) and have a market cap 74.43B USD
In his revolutionary article - "Five Forces that Shape Strategy", Michael Porter observed five
forces that have significant impact on a firm's profitability in its industry. This five forces
analysis today in the business world is also known as -Porter Five Forces Analysis. The Porter
Five (5) Forces are -

• Threat of New Entrants

• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat from Substitute Products
• Rivalry among the existing players.

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Porter Five Forces is a holistic strategy framework that took strategic decision away from just
analyzing the present competition. Porter Five Forces focuses on - how HDFC Bank Limited
can build a sustainable competitive advantage in the Foreign Regional Banks industry.
Managers at HDFC Bank Limited can not only use Porter Five Forces to develop a strategic
position with in Foreign Regional Banks industry but also can explore profitable opportunities
in the whole financial sector.

Threats of New Entrants

New entrants in Foreign Regional Banks bring innovation, new ways of doing things and put
pressure on HDFC Bank Limited through a lower pricing strategy, reducing costs, and
providing new value propositions to the customers. HDFC Bank Limited must manage these
challenges and build effective barriers to safeguard its competitive edge.

How HDFC Bank Limited can tackle the Threats of New Entrants

• By innovating new products and services. New products not only bring new customers
to the fold but also give old customers a reason to buy HDFC Bank Limited ‘s products.
• By building economies of scale so that it can lower the fixed cost per unit.
• Building capacities and spending money on research and development. New entrants
are less likely to enter a dynamic industry where the established players such as HDFC
Bank Limited keep defining the standards regularly. It significantly reduces the window
of extraordinary profits for the new firms thus discouraging inexperienced players in
the industry

Bargaining Power of Suppliers

All the companies in the Foreign Regional Banks industry buy their raw material from
numerous suppliers. Suppliers in a dominant position can decrease the margins HDFC Bank
Limited can earn in the market. Powerful suppliers in the financial sector use their negotiating
power to extract higher prices from the firms in the Foreign Regional Banks field. The overall
impact of higher supplier bargaining power is that it lowers the overall profitability of Foreign
Regional Banks.

How HDFC Bank Limited can tackle Bargaining Power of the Suppliers

• By building an efficient supply chain with multiple suppliers.

• By experimenting with product designs using varied materials so that if the prices go
up of one raw material, then the company can shift to another.
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 • Developing dedicated suppliers whose business depends upon the firm. One of the
lessons HDFC Bank Limited can learn from Wal-Mart and Nike is how these
companies developed third party manufacturers whose business solely depends on them
thus creating a scenario where these third-party manufacturers have significantly less
bargaining power compared to Wal-Mart and Nike.

Bargaining Power of Buyers

Buyers are often demanding a lot. They want to make the best offers available by paying the
minimum price possible. This put pressure on HDFC Bank Limited profitability eventually.
The smaller and more powerful the customer base is of HDFC Bank Limited the higher the
bargaining power of the customers and the greater their ability to seek increasing discounts and
offers.

How HDFC Bank Limited can tackle the Bargaining Power of Buyers

• By building a large base of customers. This will be helpful in two ways. It will reduce
the bargaining power of the buyers plus it will provide an opportunity for the firm to
streamline its sales and production process.
• By rapidly innovating new products. Customers often seek discounts and offers on
established products so if HDFC Bank Limited keeps on producing new products then
it can limit the bargaining power of buyers.
• New products will also reduce the defects of existing customers of HDFC Bank Limited
to its competitors.

Threats of Substitute Products or Services

When a new product or service meets a similar customer need in diverse ways, industry
profitability suffers. For example, services like Dropbox and Google Drive are substitutes for
storage hardware drives. The threat of a substitute product or service is high if it offers a value
proposition that is uniquely different from present offerings of the industry.

How HDFC Bank Limited can tackle the Treat of Substitute Products / Services

• By being service oriented rather than just product oriented.

• By understanding the core need of the customer rather than what the customer is buying.
• By increasing the switching cost for the customers.

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16
Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense then it will drive down prices
and decrease the overall profitability of the industry. HDFC Bank Limited operates in an
extremely competitive Foreign Regional Banks industry. This competition does take a toll on
the overall long-term profitability of the organization.

How HDFC Bank Limited can tackle Intense Rivalry among the Existing
Competitors in Foreign Regional Banks industry

• By building a sustainable differentiation

• By building scale so that it can compete better
• Collaborating with competitors to increase the market size rather than just competing
for small market.

Implications of Porter Five Forces on HDFC Bank Limited

By analyzing all the five competitive forces HDFC Bank Limited strategists can gain a
complete picture of what impacts the profitability of the organization in Foreign Regional
Banks industry. They can identify game changing trends early on and can swiftly respond to
exploit the emerging opportunity. By understanding the Porter Five Forces in detail HDFC
Bank Limited 's managers can shape those forces in their favor.

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 PESTLE ANALYSIS OF HDFC BANK

HDFC Bank Limited PESTEL analysis is a strategic tool to analyze the organization's macro
environment. PESTEL stands for - Political, Economic, Social, Technological, Environmental
& Legal factors that impact the macro environment of HDFC Bank Limited.

Changes in the macro-environment factors can have a direct impact on not only the HDFC
Bank Limited but also can impact other players in the Foreign Regional Banks. The macro-
environment factors can impact the Porter Five Forces that shape strategy and competitive
landscape. They can impact on an individual firm’s competitive advantage or overall
profitability levels of the financial industry.
PESTEL analysis provides detail about operating challenges HDFC Bank Limited will face in
prevalent macro environment other than competitive forces. For example, an Industry may be
highly profitable with a robust growth trajectory, but it will not be any good for HDFC Bank
Limited if it is situated in unstable political environment.

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18
Political Factors that Impact HDFC Bank Limited

Political factors play a significant role in determining the factors that can impact HDFC Bank
Limited's long-term profitability in a certain country or market. HDFC Bank Limited operates
in Foreign Regional Banks in more than a dozen countries and exposes itself to diverse types
of political environment and political system risks.

• Political stability and importance of Foreign Regional Banks sector in the country's
economy.
• Risk of military invasion
• Level of corruption - especially levels of regulation in the financial sector.
• Bureaucracy and interference in Foreign Regional Banks industry by government.
• Legal framework for contract enforcement
• Intellectual property protection

Economic Factors that Impact HDFC Bank Limited

The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle determine the aggregate demand and aggregate investment
in an economy.

• Economic growth rate

• Discretionary income
• Unemployment rate
• Inflation rate
• Interest rate

Social Factors that Impact HDFC Bank Limited

Society’s culture and way of doing things impact the culture of an organization in an
environment. The shared beliefs and attitudes of the population play a significant role in how
marketers at HDFC Bank Limited will understand the customers of a given market.

• Demographics and skill level of the population

• Class structure, hierarchy, and power structure in society.
• Education level as well as education standard in the HDFC Bank Limited ’s industry
• Culture (gender roles, social conventions etc.)

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Technological Factors that Impact HDFC Bank Limited

Technology is fast disrupting various industries across the board. The transportation industry
is a good case to illustrate this point. Over the last 5 years, the industry has been transforming
fast, not even giving the established players a chance to cope with the changes.
• Recent technological developments by HDFC Bank Limited competitors
• Technology's impact on product offering
• Impact on cost structure in Foreign Regional Banks industry
• Impact on value chain structure in financial sector
• Rate of technological diffusion

Environmental Factors that Impact HDFC Bank Limited

Different markets have different norms or environmental standards which can impact the
profitability of an organization in those markets. Even within a country, often states can have
different environmental laws and liability laws. For example, in United States – Texas and
Florida have different liability clauses in case of mishaps or environmental disaster. Similarly,
a lot of European countries give healthy tax breaks to companies that operate in the renewable
sector.
• Laws regulating environment pollution
• Air and water pollution regulations in Foreign Regional Banks industry
• Recycling
• Waste management in financial sector
• Attitudes toward “green” or ecological products
• Endangered species
• Attitudes toward and support for renewable energy

Legal Factors that Impact HDFC Bank Limited

In many countries, the legal framework and institutions are not robust enough to protect an
organization's intellectual property rights. A firm should carefully evaluate before entering
such markets as it can lead to theft of an organization’s secret sauce and thus the overall
competitive edge. Some of the legal factors that HDFC Bank Limited leadership should
consider while entering a new market are -

• Anti-trust law in Foreign Regional Banks industry and overall, in the country.
• Discrimination law
• Copyright, patents / Intellectual property law
• Consumer protection and e-commerce
• Employment law
• Health and safety law
• Data Protection

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 CHAPTER 3

MARKET ANALYSIS

HDFC Bank, one of India's leading private sector banks, stands at the forefront of the country's
dynamic financial landscape. Renowned for its robust financial performance and customer-
centric approach, HDFC Bank has consistently demonstrated resilience and innovation in a
rapidly evolving market. With a diversified product portfolio spanning retail and corporate
banking, the bank has secured a significant market share in key financial metrics. Embracing
digital transformation, HDFC Bank has strategically invested in innovative technologies,
fostering partnerships with fintech firms, and prioritizing cybersecurity. This market analysis
will delve into the bank's financial standing, market share, customer base, and its adeptness in
navigating technological advancements and regulatory landscapes. As we explore HDFC
Bank's strategies, risks, and competitive positioning, we aim to provide a comprehensive
snapshot of its standing in the banking sector.

1. Market Share:

• Assess HDFC Bank's market share in terms of total assets, deposits, loans, and other
relevant metrics.
• Compare market share with key competitors to identify areas of strength or potential
growth.
• As of January 2024, HDFC Bank has a market cap of $169.84 Billion. This makes
HDFC Bank the world's 70th most valuable company by market cap according to our
data.

2. Technology and Innovation:

• Evaluate HDFC Bank's adoption of emerging technologies like AI, ML, and
blockchain.
• Assess collaborations with fintech companies and their impact on innovation.
• Evaluate the functionality and adoption rates of mobile and online banking platforms.
• Examine cybersecurity infrastructure to ensure customer data and transaction
protection.
• Analyze the use of data analytics for customer insights and personalized services.
• Explore new financial products and services, such as digital payments and robo-
advisors.
• Evaluate the use of technologies like chatbots and virtual assistants for enhanced
customer service.

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 • Assess integration of RegTech solutions for compliance and streamlined regulatory
processes.

3. Financial Performance:
• In the week ending on the day of the search, HDFC Bank's share price moved up by
3.52%1.
• In the past month, HDFC Bank's share price moved up by 3.95%12.
• In the past 3 months, HDFC Bank's share price moved up by 7.15%1.
• In the past 6 months, HDFC Bank's share price moved up by 4.50%12.
• In the quarter ended March, HDFC Bank reported a nearly 20% YoY rise in net profit
to Rs 12,047 crore. Total income grew 31% YoY to Rs 53,851 crore. The board has
also approved a final dividend of Rs 19 a share

4. Customer Base:
• Analyze the size and diversity of HDFC Bank's customer base across retail, corporate,
and other segments.
• Consider customer acquisition and retention strategies, as well as customer satisfaction
metrics.

5. Product and Service Offerings:

• Review the bank's suite of products and services, evaluating competitiveness and
innovation.
• Assess how well HDFC Bank adapts to evolving customer needs and industry trends.

6. Regulatory Environment:
• Examine the regulatory landscape affecting HDFC Bank, including changes in banking
regulations, interest rate policies, and compliance requirements.
• Assess the bank's compliance measures and ability to adapt to regulatory changes.

7. Risk Management:
• Evaluate HDFC Bank's risk management practices, including credit risk, market risk,
and operational risk.
• Assess the adequacy of risk mitigation strategies in the face of economic uncertainties.

8. Competitive Landscape:
• Identify key competitors in the banking sector and conduct a comparative analysis of
strengths and weaknesses.
• Analyze any unique competitive advantages that HDFC Bank possesses.

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9. Global and Economic Factors:
• Consider global economic trends and their potential impact on the banking industry.
• Assess how economic conditions, interest rates, and geopolitical factors may affect
HDFC Bank's performance.

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 CHAPTER 4

COMPETITIVE ANALYSIS

In the dynamic landscape of the Indian banking sector, HDFC Bank has emerged as a
formidable player, commanding a substantial market share and garnering acclaim for its robust
financial performance and innovative approach to digital banking. As we delve into a
comprehensive competitive analysis, we aim to dissect the strengths and weaknesses that shape
HDFC Bank's standing in comparison to its industry counterparts. This examination spans a
spectrum from its market leadership and diversified product portfolio to potential
vulnerabilities tied to economic fluctuations and regulatory challenges. Through an exploration
of opportunities for growth and potential threats, this analysis seeks to provide a nuanced
perspective on HDFC Bank's competitive position and its strategies for navigating a rapidly
evolving financial landscape.

SWOT ANALYSIS OF HDFC BANK

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to
evaluate a company's competitive position and to develop strategic planning. SWOT analysis
assesses internal and external factors, as well as current and future potential. SWOT analysis
works best when diverse groups or voices within an organization are free to provide realistic
data points rather than prescribed messaging.

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Strengths of HDFC
HDFC’s strengths are internal, good characteristics that are under the company’s control and
the reason for its success. They are as follows.

• Large Network of Branches: HDFC Bank is India’s second-largest private

banking sector, with 2,201 branches and 7,110 ATMs.

• Strong Consumer Banking: The ATM card issued by the bank is compatible
with all domestic and international Visa/Master cards, Visa Electron/Maestro, and
American Express cards. This is one of the reasons why HDFC cards are the most
popular for shopping and online transactions
.
• Higher Customer Satisfaction: When compared to other private banks, it has an
elevated level of customer satisfaction.

• High Employee Retention Rate: The bank has a low employee turnover rate and
is regarded as one of the best places to work in the private banking sector.

• Brand’s Goodwill: It has received numerous awards and recognition, including the
title of “Best Bank” from various financial rating institutions such as Dun and
Bradstreet, Financial Express, Euromoney Awards for Excellence, and Finance Asia
Country Awards.

Weaknesses Of HDFC

Weaknesses are flaws that detract from one’s strengths. These are areas that the business may
need to improve to remain competitive
.
• No Rural Presence: HDFC Bank does not have a strong presence in rural areas,
whereas ICICI Bank is expanding in the rural market
.
• Limited Market Size: Unlike ICICI, HDFC lacks aggressive marketing strategies.
The bank primarily serves high-end clients.

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 • Underperforming Sectors: Some of the bank’s product categories are
underperforming and have limited market reach.

• Fluctuating Share Prices: The share price of the bank fluctuates frequently,
causing investors to be uncertain.

Opportunities of HDFC

External aspects in the business environment that are likely to contribute to the success of the
company are known as opportunities. Below are the opportunities of HDFC.

• Strong Fundamentals for Growth: As HDFC Bank has better asset quality
parameters than government banks, profit growth is expected to increase.

• Increasing Corporate Banking Sector: Companies, both large and small and
medium-sized, are expanding at a rapid pace. HDFC has a good reputation for keeping
corporate salary accounts up to date.

• Efficient Debt Settlement: When compared to government banks, HDFC Bank’s

unmanageable debt portfolio has improved, and its unmanageable debt recovery rate is
high.

• Foreign Markets: Because of its strong financial position, it has exceptionally good
opportunities in foreign markets, with greater scope for acquisitions and strategic
alliances.

Threats of HDFC

External elements over which the bank has no control are referred to as threats. The company
needs to develop contingency plans for coping with them if they arise.

• Increasing NPA: The non-performing assets (NPA) of HDFC increased from 0.18
to 0.20 percent. Even though it is a minor difference, it is not a good sign for the bank’s
financial health.

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 • New-Age Banks: The number of non-banking financial companies and new-age
banks in India is growing.
• Lack of Growth: The HDFC is unable to increase its market share because ICICI
poses a significant threat.

• Increasing Competition: Government banks are attempting to modernize to

compete with private banks.

• Increasing Foreign Investments: The Reserve Bank of India has granted foreign
banks permission to invest up to 74 percent of their assets in the Indian market.

7P’s Competitive Analysis Between HDFC Bank, PNB Bank & Axis Bank

AXIS BANK
FACTOR HDFC BANK PNB BANK

PRODUCT 9 7 5

PRICE 8 5 6

PLACE 8 8 8

PROMOTION 9 9 9

PEOPLE 10 10 10
PROCESS
10 8 8
PHYSICAL
9 9 9
EVIDENCE

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7 P’s OF MARKETING MIX OF HDFC BANK

Product:

• HDFC Bank offers a wide range of financial products, including savings accounts,
current accounts, fixed deposits, loans, credit cards, insurance, and investment
products.

• The bank constantly introduces new financial products and services to meet the
evolving needs of its customers.

Price:
• HDFC Bank determines pricing based on factors such as market conditions, regulatory
guidelines, and competition.

• The bank may offer competitive interest rates on loans and deposits and various fee
structures for services.
Place:

• HDFC Bank has a widespread presence with numerous branches and ATMs across
India.

• The bank has a robust online and mobile banking platform, allowing customers to
access services remotely.

Promotion:
• HDFC Bank engages in various promotional activities, including advertising
campaigns, sponsorship of events, and strategic partnerships.

• The bank uses digital marketing channels, social media, and traditional media to reach
its target audience.

People:

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 • HDFC Bank invests in training and development programs for its employees to ensure
a prominent level of customer service.

• Well-trained staff, including relationship managers and customer service

representatives, play a crucial role in customer satisfaction.

Processes:

• HDFC Bank emphasizes efficient and streamlined processes to enhance customer

experience.

• Online banking processes, loan approval processes, and customer onboarding

procedures are designed to be user-friendly and efficient.

Physical Evidence:

• The physical evidence in banking includes the appearance of branches, ATMs, and
other physical touchpoints.

• HDFC Bank ensures that its physical locations are well-maintained and provide a
professional and welcoming environment for customers.

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 CHAPTER 5

FINDINGS AND CONCLUSION

Findings:
• HDFC Bank has shown strong financial performance over the years. They have consistently
reported robust profits and have maintained a healthy asset quality.

• Their net interest income, which is the difference between interest earned and interest
expended, has been steadily growing. Additionally, their capital adequacy ratio, which
measures the bank's ability to absorb losses, has remained strong.

• They have a wide range of banking products and services, which allows them to cater to
various customer segments.

• Their effective risk management framework helps mitigate potential risks and maintain asset
quality.

• Additionally, their investment in technology enables them to provide efficient and convenient
banking solutions to customers, contributing to their overall financial success.

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CONCLUSION: -
The project highlights HDFC Bank's consistent financial growth and stability, with a particular
emphasis on its adeptness in digital transformation and customer-centric strategies. The bank's
robust financial performance is underlined by its commitment to technology, positioning it as
a frontrunner in the evolving financial landscape. Noteworthy is HDFC Bank's dedication to
customer satisfaction through a diverse product range and a strong service orientation. The
institution's adherence to regulatory standards and effective risk management practices
underscores its reliability. Additionally, strategic initiatives such as innovations and
partnerships highlight HDFC Bank's forward-thinking approach, ensuring resilience and
competitiveness. In summary, the findings underscore the pivotal role of financial strength,
adaptability, and customer-centricity in HDFC Bank's sustained success.

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