GURUFOCUS.COM » STOCK LIST » USA » NYSE » HDFC Bank Ltd (NYSE:HDB) » Definitions » Financial Strength
Switch to:

HDFC Bank Financial Strength

: 4 (As of Mar. 2022)
View and export this data going back to 2001. Start your Free Trial

HDFC Bank has the Financial Strength Rank of 4.

Warning Sign:

HDFC Bank Ltd displays poor financial strength. Usually, this is caused by too much debt for the company.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

GuruFocus does not calculate HDFC Bank's interest coverage with the available data. HDFC Bank's debt to revenue ratio for the quarter that ended in Mar. 2022 was 2.07. Altman Z-Score does not apply to banks and insurance companies.


HDFC Bank Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

HDFC Bank's Interest Expense for the months ended in Mar. 2022 was $-3,911 Mil. Its Operating Income for the months ended in Mar. 2022 was $0 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2022 was $21,426 Mil.

HDFC Bank's Interest Coverage for the quarter that ended in Mar. 2022 is

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

HDFC Bank's Debt to Revenue Ratio for the quarter that ended in Mar. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(7273.5333956341 + 21426.433528986) / 13878.054222624
=2.07

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Altman Z-Score does not apply to banks and insurance companies.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


HDFC Bank  (NYSE:HDB) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

HDFC Bank has the Financial Strength Rank of 4.


HDFC Bank Financial Strength Related Terms

Thank you for viewing the detailed overview of HDFC Bank's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


HDFC Bank Business Description

HDFC Bank logo
Address
Senapati Bapat Marg, HDFC Bank House, Lower Parel (West), Mumbai, MH, IND, 400 013
HDFC Bank is a large, publicly traded Indian bank. There are three units: retail banking, wholesale banking, and treasury. Retail banking services are offered through numerous branches and ATMs. Wholesale focuses on the largest Indian corporations, and the treasury unit offers risk-management services, such as foreign-exchange trading.
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)