PROJECT REPORT ON

A STUDY ON FINANCIAL ANALYSIS AND PERFORMANCE OF

HDFC BANK

A RESEARCH PROPOSAL SUBMITTED TO

SUBMITTED BY

VENKATESH EMBADI
Registration Number: 120124028

UNDER THE SUPERVISION OF

DR.G. USHA SREE.

DEPARTMENT OF COMMERCE & BUSINESS MANAGEMENT

CHAITANYA DEEMED TO BE UNIVERSITY,
HANAMKONDA, WARANGAL URBAN TELANGANA STATE.
INRTRODUCTION:
The banking industry has established itself as a significant player that supports
the expansion and development of the economy in the rapidly changing and
fiercely competitive world of today.
The financial industry has demonstrated a remarkable ability to adapt to the
demands of the planned economy.

Ever wondered what HDFC stands for? It is the short form for Housing
Development Financial Corporation Limited (HDFC). Since its initiation, it
has amassed huge assets and a market capitalization that has paved the way
for its success. It is currently headed by Mr. Shashidhar Jagdishan.
Today HDFC bank is one of India’s most powerful banks. It is a private sector
bank that provides various banking and investment banking services nationally
and internationally. It was founded in the year 1994 under the guidance of Mr.
Hasmukh Bhai Parekh.

Since then, the banking company has expanded its reach in various cities across
India and overseas. On the international level, it has branches in Bahrain, Hong
Kong, and offices in UAE and Kenya. To date, the company has branches
across 2,848 cities in India with a vast network of 5,430 branches.

The HDFC bank was inaugurated in 1994. It started deploying banking services
as a Scheduled Commercial bank in 1995. The Housing Development Finance
Corporation Limited was the first company to set up a private bank in India. It
provided services from the registered bank in Mumbai. The current CEO of the
HDFC bank is Mr. Shashidhar Jagdishan. The main aim of the HDFC bank was
to become a world-class Indian Bank.

HISTORY OF HDFC BANK:

It’s been 26 years since the bank first opened at its registered office in Mumbai.
As per the Reserve Bank of India RBI’s policy about the liberalization of the
banking industry in India, the request by the HDFC bank to set up the first
Indian bank in the private sector was approved.

The Housing Development Finance Corporation Limited (HDFC) was amongst

the first to receive an 'in principle' approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector, as part of the RBIs liberalization of
the Indian Banking Industry in 1994. 'The bank 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. HDFC Bank is the second largest private sector Bank in India
and one of the top 5 banks in the country. It offers a variety of financial services
like consumer banking, credit cards, corporate banking, investment banking,
private banking, wealth management etc. it is one of the members in the 30
stock senses and 50 stock nifty. HDFC Bank has two subsidiaries viz., HDB
financial services limited and HDFC securities Limited. HDBFS is a non-
deposit taking non-bank finance company ('NBFC'). Apart from lending to
individuals, the company grants loans to micro, small and medium business
enterprises. It also runs call centres for collection services to the Bank's retail
loan products. HDFC Securities Limited has emerged as a strong player in the
broking services spaces

The HDFC bank, as it is popularly called, was one of the first banks in India.
The main operations of the financial company as a Scheduled Commercial bank
first commenced back in January 1995.

The bank has had a long history. Some of these factors were instrumental in
making it the premium bank in India. So, here I have provided a descriptive
guide about the history of this bank.

NEED, SCOPE AND OBJECTIVE OF STUDY:

SCOPE:

The scope of this research is to identify the service quality of HDFC bank. This
research is based on primary and secondary data. This study focuses on the
dimensions of service quality. It aims at to understand the skill of the company
and performance of the company and those areas which require improvement.
This study also helps to understand the financial performance of private sector.

NEED:

The study would try to throw the insights into the existing services provided by
the banks, perceptions and actual service provided by the bank. The result of the
study would be able to recognize the faults and provide some better
performance and improvements need in the company. It helps to find some
better solutions which helps to success of the company.

Objective:

1.To evaluate the financial performance of the company

2. To analyze the liquidity and solvency position of hdfc bank.
3. to find the changes in the trends of the bank using trend analysis.
4. knowing the current market situation of its shares and the relative value of the
shares.
5. To understand the liquidity, profitability and efficiency of the company
during the study.
6. Assessment and analysis of various financial performance facts of a
company.
7. The essence of the study is to understand the financial structure of the HDFC
bank.

REVIWE OF LITERATURE:

1) BikRanjit Singh in his article captioned “The Financial performance of

HDFC and SBOP: A comparative Study” has examined the profitability
aspects of both the banks and found that the profitability of HDFC Bank
is higher as compared to SBOP bank.

2) Nishit V. Davida in his article titled “Performance Appraisal of New

Private Sector banks in India” examined the economic performance and
financial performance of the seven major private sector banks in India.

3) N. S. Varghese (2000) is of the opinion that new generation private sector

banks with their latest technology are able to implement e-banking and
are highly preferred by investors in the stock market. He also points out
 that prominent new generation private sector banks like HDFC and ICICI
have entered into internet banking through which greater convenience is
offered with lower transaction cost.

4) Kalpesh B. Gelda in his article titled “A comparative study on

performance and working capital management of ICICI and HDFC
Banks” has given the different ways and techniques of working capital
management to develop the sound financial base of the two banks.

Financial performance :

The Bank has maintained its leadership position and delivered consistent growth
across a majority of its key financial parameters. Despite being a pandemic-
disrupted year, it has held its own with a strong customer base, robust risk
management framework and best governance practices.

The percentage increase in performance indicators was subdued as compared to

a pre-COVID-19 year; even so, the year on- year increase in key metrics shows
a healthy and continued growth. The Bank’s growth metrics like its Balance
sheet size which crossed `17 Lakh Crore – a 14.1% increase, was driven by
similar increase in Advances (14.0%) and Deposits (16.3%). Our efficiency in
managing capital can be seen from a 27.0% increase in our low-cost CASA
deposits – the highest in previous three years. Our profitability in disruptive
times, is an outcome of the operational efficiencies built into our system. We
continue to deliver a double-digit growth in earnings, with an increase of 18.5%
in net profit, while keeping a check on our operational costs, resulting in a lower
cost to income ratio of 36.3%. The Bank’s business resilience is an important
indicator of our credit risk evaluation and management. Our key strength
continues to be maintaining one of the lowest levels of Gross Non-Performing
Assets (NPAs) in the Banking industry with provision coverage ratio of 69.8%.
RESEARCH METHODOLOGY:
Research methodology deals with the method of study i.e., how the study can be
carried out and what techniques can be used. it is the careful investigation anti
enquiry in a systematic manner in order to find out a solution to problems in
research. lt consists of defining and redefining the problems, formulating the
hypothesis or suggestions solutions, collecting data and evaluating the data and
at last carefully testing the conclusions to determine whether they fit the
formulated hypothesis or not.

(a) Collection of data: Both the primary and secondary data have been
collected from the market and the company respectively. The secondary data
was provident through books, magazines and websites or the stock market.
stock exchange and the primary data was collected through medium or face-to-
face interactions. interviews with the persons of the stock market/stock
exchange.

(b) Organization of data: Data once collected needed to be organized for

further processing.

(c) Presentation of Data: The data collected is of no use unless and until it is
given in a presentable form. Thus, after proper organization, the data is given in
a presentable form with complete details with the help of a bar /graph/ picture
/diagram etc.

(e)Analysis of the Data: The data is carefully analyzed keeping in

consideration both the pros and cons for the purpose of arriving at concrete
solutions.

(f)Interpretations of Data: After carefully analyzing the data, it has been

aptly interpreted in order to give concrete solutions and proper
recommendations

RESEARCH DESIGN:

Research design states the conceptual structure within which research is to be

conducted. A research design is simply a plan for a study. This is used as a
guide in collecting and analyzing the data. it can be called a blueprint to carry
out the study. it is like a plan by an architect to build a house, if research is
conducted without a blueprint, the result is likely to be different from what is
expected at the start. The blueprint includes
(1) interviews to be conducted, observations to be made, experiments to be
conducted, and data analysis to be made.
(2) Tools used to collect data such as questionnaires.
(3) what is the sampling method used?

A successful design stems from a collaborative process involving good planning

a communication.

Descriptive research: This topic includes descriptive research. The main

purpose of descriptive research is to describe the state of view as it exists at
present. Simply stated, it is a fact-finding investigation.

Secondary Data: Secondary data are those which have already been collected
by someone for this study, the following secondary data are used.

1. Websites
2. Finance Books
3. Annual reports of the company
4. Articles.

REFERENCES:

1. Bikranjit Singh in his article

captioned “The Financial
performance of HDFC and
SBOP: A comparative Study”
Excel International Journal of
Multidisciplinary Management
Study, Vol.s Issue 3, March
 2012, PP.157-174.

2. Nishit V.Davda in his article titled “Performance Appraisal of New Private

Sector banks in India”, International Journal of Computational Engineering &
Management. Vol.2, Issue 8, Aug 2012,PP. 1392-1399.

3.www.rbi.com
4.http://www.moneycontrol.com/nancials/hdfcbank/balance-sheetVI/HDF01
5.http://www.hdfc.com