Revenue (in cr)
• HDFC Bank is performing the best in terms of revenue growth, with the highest CAGR of 21.2%.
• ICICI Bank and Axis Bank have CAGRs of 14.4% and 13.7%, respectively, indicating steady growth but at a slower rate compared to HDFC Bank.
• Also the great rise in revenue from FY23 to FY24 with a CAGR of 66% is due to the merger of HDFC Bank & HDFC Ltd.
EPS
• The consistent growth in both revenue and EPS suggests that HDFC Bank is maintaining strong operational efficiency and profitability. But, The revenue of HDFC Bank increased significantly by 66.1% from March 2023 to March 2024. However, the EPS only increased by 2.3% during the same period because the merger lead to increase in liabilities due to the financing of HDFC Ltd with bonds that lead to high costs.
• ICICI & Axis Bank shows steady growth but the EPS volatility suggest periods of financial stress in managing costs or profitability. But the increase in EPS in FY 24 suggest better cost management, improved asset quality, or other strategic improvements.
Net Interest Margin
• HDFC Bank’s strong and consistent NIM has supported its revenue growth and robust EPS. The merger in 2023 initially lead to a slight reduction in NIM due to the integration of HDFC Limited’s loan portfolio and impact on margins.
• ICICI Bank’s improving NIM aligns with its recovering EPS, indicating better interest income management and lending practices.
• Axis Bank’s NIM shows improvement, though volatility remains. Strengthening its lending practices and stabilizing NIM will be crucial for consistent EPS growth.
Credit Deposit Ratio
• CD ratio of HDFC Bank remains fluctuating between 88.28% and 94.22% from 2017 to 2023, but in 2024 the ratio is 107% which is a huge spike which occurred due to increase in credit due to the merger of HDFC Bank & HDFC Ltd and no deposits brought in by HDFC Ltd., as it is an NBFC.
• HDFC bank should focus on bringing down the CD ratio for a stable liquidity position.
• ICICI Bank shows a conservative approach with a significant drop in CD ratio, improving liquidity. The slight rise in 2023 indicates a balanced lending strategy.
• Axis Bank exhibits fluctuations but maintains a CD ratio around 90%, reflecting a strategic balance in its lending and deposit mobilization.