Marketing Performance Metrics (MSM-6421)

PERFORMANCE ANALYSIS OF HDFC

AND AXIS BANK

Project Report

Submitted to: Jeevan Arakal

Submitted by: -
Anshay jain- 21M103
Mona Sarraf- 21M119
Samiksha Agarwal- 21M126
Shloke Saha- 21M130
Introduction

HDFC Bank
The Reserve Bank of India (RBI) gave "in principle" approval to the Housing Development
Finance Corporation Limited, or HDFC, one of the first financial institutions in India to set up a
bank in the private sector. This was carried out as part of the RBI's policy to liberalize the Indian
banking sector in 1994.
With its registered office in Mumbai, India, HDFC Bank was established in August 1994
under the name HDFC Bank Limited. In January 1995, the bank began conducting business as a
Scheduled Commercial Bank.
The Bank had a nationwide distribution network of 6,378 branches and 18,620 ATMs in
3,203 cities/towns as of June 30, 2022.

Axis Bank
Axis Bank is India's third largest private-sector bank. The bank provides the full range of
financial services to customers in the Large and Mid-Corporate, MSME, Agriculture, and Retail
Business segments.
As of March 31, 2022, the bank had a large footprint of 4,758 domestic branches (including
extension counters), 10,990 ATMs, and 5,972 cash recyclers spread across the country. As of
March 31, 2022, the bank had 6 Axis Virtual Centers with over 1,500 Virtual Relationship
Managers.
Axis Bank was one of the first new generation private sector banks to open its doors in
1994.
Market Share of HDFC bank and Axis Bank from
2018-19 to 2021-22
.

 The banking sector's total revenue in 2018-19 was 195.19 billion. HDFC had a 5.1%
market share up to 9.8 billion, while Axis Bank had a 1.7% market share up to 3.26
billion.
 The banking sector's net revenue increased by 8% in 2019-2020. The total revenue in
2019-20 was 210.68 billion. HDFC and Axis Bank's net sales increased by 16% and 20%,
respectively, over the previous year, which is 11.4 billion and 3.9 billion respectively, but
their market share improved significantly, from 5.1% to 5.4% (HDFC) and from 1.7% to
1.9% (Axis Bank)

 In 2020-21, the Banking sector increased by 17% from 210.68 billion to 247.17 billion.
HDFC and Axis Bank's net sales increased at almost the same rate, that is 5% and 6%
respectively, over the previous year, which is 12.08 billion and 4.1 billion, but their
market share declined this time, from 5.4% to 4.9% (HDFC) and from 1.9% to 1.7%
(Axis Bank).

Axis- 1.1%
  In 2021-22 Banking sector increased by 83% from 247.17 billion and 451.85 billion.
HDFC and Axis Bank's net sales increased at 6% and 17% respectively, over the previous
year, which is 12.77 billion and 4.8 billion, but their market share declined rigorously this
time, from 4.9% to 2.8% (HDFC) and 1.7% to 1.1% (Axis Bank).
Analysis for All
 From 2018 to 2022, total banking revenue increased by 131.49%, with years 2021-22
showing an 83% increase. People's investments fell drastically because of the COVID
because banks were offering low interest rates on investments, but the situation improved
immensely after the COVID, and people began investing in banks again.
 HDFC's market share increased in 2019-20 but then fell, as did Axis Bank's, but HDFC's
market share is decreasing at a faster rate than Axis Bank's.

Critical evaluation of marketing activities

HDFC BANK:
 List of marketing activities in the year 2018- 2022

 In 2018, HDFC launched next-gen mobile banking app launched.

 It signed MoU with the government to financially empower 2 Lakh rural Indian villages
through CSCs.
 In 2019- Voted no 1 in India by customers in Forbes World’s best banks survey.
 BSE inked a pact with the Bank to give a boost to the start-up platform.
 1 million+ units of blood collected via HDFC bank Parivartan’s Blood Donation drive
over a period of 12 years, primarily from employees
 Opened 5000th branch
 It was Ranked India’s most valuable brand by BrandZ report in 2020
 Launch of HDFC bank Milennia range of cards
 First of its kind product launch: KGC Shaurya card for armed forces
 Launch of contactless, consent-based customer onboarding via video KYC facility
 Deploying mobile ATMs during the lockdown
 Launched the healthy life program with Apollo Hospitals for customers and employees
 In 2021 started Project ‘Future Ready
 In 2022 HDFC Bank and HDFC Ltd announce transformational merger
 HDFC provides three banking services
1) Wholesale Banking: In this, HDFC focuses on serving MNCs, Large corporates, Business Banking,
Public Sector enterprises, etc. The bank offers Loans and deposits, Investment Banking services
and Forex & Derivatives, Letters of credit, etc.
 2) Retail Banking: This segment focuses on serving individuals, self-employed, salaried, Kirana
stores, Self Help groups, etc. The aim of this segment is to offer based on the needs of
customers. They offer various types of loan such as Person, auto, mortgages, gold, two-wheeler,
tc, accounts and deposits, and other products and services like credit, debt and prepaid cards
etc.
3) Treasury: This manages the treasury needs of customers and earns a fee income generated
through customer transactions with banks while managing their interest rate risk as well as
foreign exchange. It offers foreign exchange and derivatives transactions, Trade solution, Asset
liability management, maintaining portfolio of Government securities etc.

 Customer Centric initiatives:

1) Salam Dil sey: This platform was launched on Doctors Day to thank doctors and their families to
continue to fight the pandemic and put a smile on their faces. Because of this initiative, HDFC
bank reached out to 23Mn+ people through social media, print and SMS.
2) Mooh Band Rakho: This second edition of this campaign was launched on International Fraud
Awareness Week in November 2021 which aimed at increasing awareness on financial fraud,
and not to disclose information, especially bank details etc. Under this, 2000 workshops were
conducted over the timeline of four months across the country.
3) Festive treats 3.0: HDFC bank joined hands with over 10000 merchants across 100 locations and
offered fabulous deals to its customers.
4) My Cards: A digital self-service platform that was introduced by adding convenience, ease of
usage, and smarter user design into a mobile-friendly ON THE GO service platform. This was
introduced on 1st Oct 2021 and since then over 2.5cr service requests have been processed here.
 They spent 2161308000 in 2021-22 on advertisement and publicity while the marketing and
distribution commission income for the year ended March 31, 2022, is 3059.05 crore.

Growth in
HDFC bank 2021-22 2018-19 %
Branches 6342 2748 130.79%
Customers 71000000 49000000 44.90%
Total employees 141579 98601 43.59%
Net profit 369613000000 210780000000 75.35%
Total Banking outlets 21683 5103 324.91%
total atms, cash deposit and withdrawal
machines 18130 13160 37.77%
137241.88
Advertisement and publicity 2161308000 15,73,670 %

HDFC bank has expanded by 324.91% as compared to 2018-19 which has in turn increased the
customer base by 44.90%. They have invested quite a good amount on advertisement and publicity as
compared to 2018-19 by 137241.88%
Axis Bank

List of marketing activities in the year 2018-22

 Axis Bank started a program called ‘Sparsh’ in order to build differentiating consumer
experience and drive Net promoter score. It’s core credo is “Delight our consumers and fulfill
their dreams, through smart banking every day”.
 An enterprise-wide unified platform, Saksham Customer relationship platform has been
established. This is used by branch banking and provides 360 degree view of consumer
relationships on single screen
 Project Sankalp, a tech driven transformation initiative, is made for the SME consumers and
provide access to data driven credit decisions, minimal documentation and simplified products.
 Project Neo, a corporate banking programe has been established for corporate consumers. It
helps in implementing an open ecosystem, promoting intelligent product recommendation etc.

Axis Bank 2021-22 2018-19

Branches 4758 4050 17.48%
Customers 10100000 25100000 -59.76%
Total employees 85500 61940 38.04%
Net profit 13025 4677 178.49%
total atms, cash deposit and withdrawal
machines 16900 16700 1.20%
1,01,81,37,00,00,
Advertisement and publicity 73,25,98,00,00,000 000 -28.05%

Axis bank has expanded by 17.48% as compared to 2018-19 which has, in turn, increased the profit
178.49%. Their customer base has decreased by 59.76% because they are not focusing on advertising
and publicity right now.

HDFC Bank Axis Bank

Branches 130.79% 17.48%
Customers 44.90% -59.76%
Total employees 43.59% 38.04%
Net profit 75.35% 178.49%
total atms, cash deposit and withdrawal
machines 37.77% 1.20%
Advertisement and publicity 137241.88% -28.05%

When comparing both the banks, the following were the important points noted

 Though HDFC bank is investing in expanding its reach, Axis bank is investing but at a lower rate.
The reason for this could be because they are focusing to be in the urban market.
  HDFC bank has been focusing on increasing consumer awareness and reach while Axis bank is
cutting those costs. It has decreased the advertising cost by 28.05% and hence there is a
fference in customer acquisition.
 Axis bank hiring has increased but they are not focusing on their core product and services as
compared to HDFC bank.
 Though the customer base and total ATMs opened of HDFC bank was on the lower side when
compared to Axis bank, there has been a tremendous increase in Net profit and stood at
178.49%

Key distribution indicators

Numeric distribution ( Axis Bank)

( Number of outletscarrying a brand )

( total number of outlets )

1000000
For axis bank, numeric distribution= = 0.09901%
10100000
1000000 is the POS machines of Axis bank and 10100000 is the total number of Axis Bank
outlets. As you can see from the above 0.09901% is the total number of outlets that carry axis
bank products.
The total number of outlets is 6342. This graph depicts the area-wise outlet figuare. HDFC has
2036 branches in rural areas, 1312 in urban areas, 1843 in semi-urban areas, and 1147 in metro
areas.

Number of outlets increased over a period. It showed a growth of 17% from 5416 to 6342. With 16642
ATMs across 2929 cities and towns.

Aggregate financial performance of the

company
HDFC Bank
KEY PERFORMANCE RATIOS 2021-22 2020-21 2019-20 2018-19

ROCE (%) 3.22 3.42 3.33 3.34

CASA (%) 48.16 46.11 42.23 42.37
Net Profit Margin (%) 28.93 25.74 22.86 21.29
Operating Profit Margin (%) 5.83 4.89 2.60 3.48
Return on Assets (%) 1.78 1.78 1.71 1.69
Return on Equity / Networth (%) 15.39 15.27 15.35 14.12
ROI (Return On Investment) 8% 7% 7% 7%
Current Ratio 19.04 17.88 16.83 17.24

 The net profit margin increased from 2018-19 to 2021-22, showing that the bank is doing
well, profits are increasing, and if the trend continues, it will most likely increase further
next year.
 ROI has remained constant over the last three years, but it will increase by 1% from 7%
to 8% in 2021-22. This implies that either net profit increased, or people's investments
decreased.
 CASA (Current and Saving Account) is also increasing, indicates that a larger part of the
bank's deposits has come from current and savings deposits.
 ROCA (Return on Capital Employed) is unpredictable because it decreased in 2019-20
but increased the following year and then decreased even more the following year. High
ROCE is thus a sign of a successful growth company, but we can't say anything about it.
 Bank is showing prominent level of liquidity as current ratio is increasing. The higher the
current ratio, the more capable a company is of meeting its obligations because it has a
higher proportion of short-term asset value compared to the value of its short-term
liabilities.

Axis Bank
KEY PERFORMANCE RATIOS 2021-22 2020-21 2019-20 2018-19

ROCE (%) 2.20 2.70 2.68 2.47

CASA (%) 44.99 44.92 41.19 44.37
Net Profit Margin (%) 19.33 10.35 2.59 8.50
Operating Profit Margin (%) -3.25 -12.96 -22.20 -15.37
Return on Assets (%) 1.10 0.66 0.17 0.58
Return on Equity / Networth (%) 11.30 6.48 1.91 7.01
ROI (Return on Investment) 5% 3% 1% 3%
Current Ratio 16.84 17.27 17.89 18.81
  The year 2019-2020 has proven a downfall because of COVID, there every financial ratio
is coming down which means the company didn’t do well at the time. People stopped
investing in banks and banks were offering exceptionally low interest on their
investments.
 The net profit margin fluctuated in 2019-20 it goes up but on the diminishing rate then by
next year the bank got immensely higher growth in Profit margin and so on. But with this
we can’t predict next year's profit increasing rate
 Same with ROI it decreased by 2% in 2019-20 but again increased by same percentage
next year. But next year also came with a higher ROI which directly indicates the
connection with Net profit
 ROCA (Return on Capital Employed) has mostly increased except last year when it
decreased. High ROCE is thus a sign of a successful growth company, but we can't say
anything about it.
 Bank is showing prominent level of liquidity as current ratio is increasing. The higher the
current ratio, the more capable a company is of meeting its obligations because it has a
higher proportion of short-term asset value compared to the value of its short-term
liabilities.

Common analysis
 Axis Bank is outperforming HDFC. Axis Bank's operating profits are falling.
 Furthermore, HDFC uses its assets more efficiently than Axis Bank.
 Although HDFC has a higher ROCA and CASA ratio for both, it does not make a
difference because their growth rate is higher and they earn most of their money through
current and savings accounts, which protects them from having to pay higher interest
rates.