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nflow of US$ 29.6 billion inflow during 2007-08. The current account deficit stood at US$ 29.8 billion (2.6 per cent of GDP) in 2008-09 as against US$ 17.0 billion (1.5 per cent of GDP) during 2007-08. The CAD was driven mainly by a sharp slowdown in exports and imports growth outpacing the growth in exports led to a widening of trade deficit to US$ 119.4 billion (or 10.3 per cent of GDP) in 2008-09 from US$ 91.6 billion (or 7.8 per cent of GDP) in 2007-08 (Jha, 2008).

Has the present global crisis affected India's domestic economy? To answer this it is necessary to look at current macroeconomic fundamentals. Latest RBI estimates place India's growth rate during 2008-09 at 7.7 per cent. Most other estimates also place GDP growth for the year in the range of 7-8%. During the first quarter of 2008-09 (April-June) Indian economy grew at 7.9 per cent, though growth is expected to slow down in the subsequent quarters as the slowdown takes hold. The first indication has already come from the index of industrial production (IIP). According to latest data, the IIP grew 4.8% in September 2008 as against 7% in the corresponding period last year. The cumulative growth during April-September 2008 was only 4.9% as against 9.5% during the corresponding period in previous year. While the September figure is an improvement over the dismal growth of 1.3% recorded for August 2008, it is too early to see it as a recovery from the previous low.

Chapter 3

Company Description

3.1 Company Profile

The Housing Development Corporation (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 RBI's liberalization of the Indian Banking Industry in 1994. The Bank was incorporated in August 1994 in the mane of ‘HDFC' Bank Limited' with its registered office in Mumbai, India. HDFC Bank commenced operations as a scheduled commercial Bank in January 1995. The Bank currently has a nationwide network of 1416 Branches and 3382 ATM's in 550 Indian towns and cities.

3.2 Financial Results Update

HDFC Bank disclosed a substantial rise in standalone net profit for the quarter ended June 2009, helped by healthy growth in total income and higher operating margin. During the quarter, the profit of the bank rose 30.53% to Rs 6,061.10 million from Rs 4,643.50 million in the same quarter last year. Interest earned for the quarter rose 13.02% to Rs 40,931 million, while total income for the quarter rose 21.86% to Rs 51,367.50 million, when compared with the prior year period. EPS for the quarter rose 30.05% to Rs 14.22, when compared with the prior year period.

Net interest income (interest earned less interest expended) for the quarter ended June 30, 2009 was Rs 18,555.80 million, driven by average asset growth of 10.5% and net interest margin (NIM) of 4.1%. Other income (non-interest revenue) registered strong y-o-y growth of 75.9% to Rs 10,436.50 million for quarter ended June 30, 2009. The largest contributor to the `other income was fees and commissions of Rs 6,490 million, up 27% over corresponding quarter ended June 30, 2008.