HDFC Bank Stock vs Kotak Bank Stock

HDFC Bank Stock vs Kotak Bank Stock

A comparison between these 2 banks has been presented here. The comparison is done in quantitative terms. This comparison is just to get a perspective on how these banks stand against each other.

Basic Information

ParametersHDFC BankKotak Bank
Market Cap (Rs. Crore)5,65,8332,36,224
Stock P/E29.735.8
ROCE7.32%7.93%
ROE17.87%13.87%
Total Capital Employed (Rs. Crore)1,17,63725,779
Total Assets (Rs. Crore)10,63,9883,37,720
Average ROCE – 3Years7.678.43
Interest Coverage Ratio1.641.7
D/E Ratio8.584.95
D/B Ratio5.324.68
Dividend Yield0.60.06
Promoter Holding21.43%30.02%
PEG Ratio1.411.55
Interest Coverage1.641.7
PAT Growth 5 Years21.05%23.05%
Sales Growth 5 Years18.01%18.32%
Gross NPA1.30%2.22%
Net NPA0.40%0.98%
  • In terms of PE, Kotak bank seems to be little over-priced in comparison with HDFC bank.
  • ROCE of both the banks is almost same.
  • ROE of HDFC bank looks better than the ROE of Kotak Bank.
  • Total Capital Employed of HDFC bank is almost 4 times that of Kotak bank.
  • Total Assets are the loans given in the market.
  • If the Interest Coverage ratio of a company falls below 2.5 then it can be an alarming sign. But this can be said in the case of banks, because their itself is of borrowing and lending. In case of banks, having interest coverage ratio above 1 is healthy. The banks have almost similar values, but Kotak has a little advantage.
  • Banks will always higher D/E ratio values as their business is of lending itself.
  • In terms of P/B ratio, HDFC bank looks a little over-priced.
  • Both the banks have dividend yield lower than the industry average. Lower the dividend yield the better it is for a bank. This means that promoter wants to still re-invest the money rather than taking a payout as a dividend.
  • The major promoter holder in HDFC bank is HDFC Ltd and the promoters of Kotak Bank are Mr. Uday Kotak family. RBI has instructed the promoters of Kotak Bank to reduce their holding in the bank up to 20% before 31st December 2018.
  • The PAT growth of Kotak bank is more.
  • Sales growth of the banks are almost same.
  • Gross NPA and Net NPA are two of the most important parameters here. HDFC bank scores very well here as their Gross NPA is very low in regards of their loans given in the market. In Net NPA too, HDFC bank has upper hand over Kotak bank.

Last 12 Quarter Results

HDFC vs Kotak Bank Quarterly Performance

These are the Quarter-on-Quarter results of the last 3 years.

  • Sales of HDFC bank has been increasing every quarter. Which is a very good sign.
  • Kotak bank too is growing on the same line. Only one quarter it has shown negative growth. But overall Kotak bank is also growing nicely.
  • In Net profit, there are only 3 quarters where HDFC bank has shown a little negative growth in quarter-on-quarter.
  • And in Kotak bank, there are only 2 negative growth quarters.
  • On these parameters, both the banks are growing only similarly.

Yearly Performance

HDFC vs Kotak Bank Yearly Performance

This is the yearly performance of the banks for the last 10 years.

  • Sales growth of HDFC bank in 10 years is 23.01%. And that of Kotak bank is 21.29%.
  • Net profit growth 10-Year CAGR of HDFC bank is 27.10%. And that of Kotak bank is 20.13%.

We have also shown sales & net profit growth on the base of 3-years rolling returns.

  • Here, one can see that in the last 3-year rolling returns of the last 3 years, the sales growth of Kotak bank is being beating those of HDFC bank.
  • And in profitability too, the 3-year rolling returns of last 2 years, the growth momentum can be seen shifting to the side of Kotak bank.

Share Price Movement

Comparison Chart HDFC vs Kotak shares

Source – Moneycontrol.com

  • The price movements of the stocks of both the companies is almost same.
  • Both the banks given around 700% returns in the last 10 years.
  • The returns of HDFC bank are a little higher as their dividend yield too has been a little higher as compared to Kotak bank.

Note: –

  • We are in no way telling anyone to go and invest in stocks immediately.
  • We are also not suggesting that these two are the best banks and to buy the stocks of these banks. Neither are we suggesting which one is better to buy.

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