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    FM Cce1

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    FM Cce1

    Uploaded by

    sudarshan9698
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    FM CCE1

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    FM Cce1

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    of 5

    A

    Report
    On
    Leverage Analysis.
    Submitted To
    Dr. D. Y. Patil Institute of Management and Research,
    Pimpri, Pune – 411018.

    Department of
    MASTER OF BUSINESS ADMINISTRATION.
    Submitted By
    Rakshe Suadarshan Prakash

    Div -C
    Roll no: MB-I-181.
    Under The Guidance Of
    DR. PRIYA VASAGADEKAR.
    Company Name:- HDFC Bank
    About the Company:
    Formerly: Housing Development Finance Corporation Limited
    Company type: Public
    Traded as: BSE: 500180, NSE: HDFCBANK, NSE NIFTY 50
    Constituent
    ISIN: INE040A01034
    Industry: Banking, Financial services
    Founded: 1994; 30 years ago
    Founder: Hasmukh Bhai Parekh
    Headquarters: Mumbai, Maharashtra, India.
    Key people: Shyamala Gopinath (Chairperson), Sashidhar Jagdish an (MD &
    CEO)
    Products: Retail banking, corporate banking, Investment banking, Mortgage
    loans, Private banking, Wealth management, Credit cards, Finance and
    insurance, Consumer banking, Payment solutions, Asset management
    Services: Banking, Wealth management, Insurance, Investments, Credit cards,
    Mortgage loans
    Revenue: Increase ₹138,197 crore (US$18 billion).
    Operating income: Increase ₹49,741 crore (US$6.6 billion).
    Net income: Increase ₹31,116 crore (US$4.1 billion).
    Total assets: Increase ₹17,41,853 crore (US$230 billion).
    Total equity: Increase ₹2,08,797 crore (US$28 billion).

    Number of employees: Increase~120,000+


    Subsidiaries: HDB Financial Services, HDFC Securities, HDFC Mutual Fund,
    HDFC Life, HDFC ERGO, HDFC Pension Management Company, HDFC Realty,
    HDFC Property Ventures, HDFC Credila Financial Services, HDFC Sales, HDFC
    Chubb General Insurance Company, HDFC Standard Life Insurance Company,
    HDFC Asset Management Company Limited, HDFC General Insurance Limited.
    FY 2019 FY 2020 FY 2021 FY2022 FY 2023

    EBITDA 35,538.83 39,471.62 44,181.16 52,554.11 63,843.86

    PBIT 34,318.16 38,194.85 42,796.15 50,873.38 61,498.39

    PBT
    4,318.16 38,194.85 42,796.15 50,873.38 61,498.39
    NET INCOME
    22,332.43 27,253.95 31,833.21 38,052.75 45,997.11
    EPS
    41.99 49.87 57.90 68.82 82.69

    ➢ Leverage Analysis:

    Particular. Formula. 2019 2020 2021 2022 2023

    Operating Contribution/E BIT


    Leverage 1.035 1.033 1.032 1.033 1.038

    Financial Leverage
    EBIT/EBT 7.94 1 1 1 1

    Combine Leverage Contribution/E BT


    8.17 1.033 1.032 1.381 1.387
    ➢ Operating Leverage: Fluctuated significantly from 2019 to 2023,
    indicating varying sensitivity to changes in sales volume.
    ➢ Financial Leverage: Also fluctuated, suggesting changes in the
    company’s use of debt financing.
    ➢ Combined Leverage: Varied over the years, reflecting the total risk
    from both operating and financial aspects.

    In summary, the company experienced significant changes in its operating


    and financial structure from 2019 to 2023. Further investigation is needed to
    understand the reasons behind these fluctuations.

    ➢ Inferences:
    The company’s operating leverage fluctuated significantly, indicating that its
    operating income was highly sensitive to changes in sales volume. This could
    suggest that the company has a high proportion of fixed costs relative to
    variable costs.
    The financial leverage also varied, suggesting that the company’s use of debt
    financing changed over the years. A higher financial leverage ratio could
    indicate a higher risk of default or insolvency, especially if the company is
    unable to meet its debt obligations.
    The combined leverage showed that the company’s total risk, considering both
    operating and financial aspects, varied significantly. This could be indicative of
    the overall volatility in the company’s earnings due to changes in sales, cost
    structure, and debt financing.
    ➢ Conclusion:
    The fluctuations in the company’s operating, financial, and combined leverage
    from 2019 to 2023 suggest significant changes in its financial and operational
    strategies. These changes could be due to variations in sales volume, cost
    structure, and debt financing. It’s crucial for the company to effectively manage
    these risks to ensure its long-term sustainability. A deeper dive into the
    company’s financial statements and operational reports would provide more
    insights into these changes and help devise strategies for future growth and
    stability.

    ➢ Reference:
    1. Money control.
    2. Ticker Tape.

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