HDFC Bank Q2 Preview | Profit may rise 15% with stable asset quality and net interest margin

HDFC Bank, India’s biggest personal quarter lender, can also additionally file standalone income boom of 15 percentage withinside the 2nd zone of this monetary yr, specialists stated.

Growth in all of the bank’s key parameters is anticipated in double digits and its asset excellent will probably be solid withinside the 3 months ended September 30.

Profit, which improved 18.four percentage to Rs 7,513 crore withinside the September zone of ultimate yr, can also additionally develop with aid from different profits, pre-provision running income, internet hobby profits and solid asset excellent. Loan loss provisions are anticipated to stay barely extended as compared to a yr ago, however decrease than withinside the June zone.

The HDFC Bank inventory surged in past due alternate on October 14 and closed at a document Rs 1,685.90, a advantage of 2.86 percentage, in advance of the quarterly profits scheduled on October 16. The bank’s stocks have received thirteen percentage because the begin of the September zone.

Net hobby profits, the distinction among the hobby earned and expended, may want to upward push via way of means of approximately 10 percentage YoY on mortgage boom of 15.four percentage, with the internet hobby margin probably unchanged at four percentage.

“We anticipate internet hobby profits boom at round eleven percentage YoY led via way of means of mortgage boom of round 15 percentage YoY (weaker car income and decrease credit score card receivables boom offset via way of means of better SME boom). We anticipate internet hobby margin to be unchanged at four percentage. Revenue boom could be aided via way of means of non-hobby profits, often aided via way of means of a decrease base,” stated Kotak Institutional Equities, which expects income to boom 15.five percentage from a yr in advance.

Prabhudas Lilladher expects 15.five percentage boom in income and 10 percentage boom in internet hobby profits.

Advances at approximately Rs eleven.ninety eight lakh crore as of September grew via way of means of 15.four percentage YoY, following a thirteen percentage boom in retail loans, 27.five percentage boom in business and rural banking loans, and six percentage boom in different wholesale loans, HDFC Bank stated on October four at the same time as disclosing provisional numbers. Loan boom on a sequential foundation changed into four.four percentage.

Deposits improved 14.four percentage to Rs 14.06 lakh crore as of September from a yr in advance, with boom of 17.five percentage in retail deposits and a pair of percentage in wholesale deposits. Quarter-on-zone boom in deposits changed into four.five percentage provisionally.

Current and financial savings account (CASA) deposits grew 28.6 percentage to Rs 6.fifty eight lakh crore withinside the 2nd zone. The bank’s CASA ratio changed into approximately forty seven percentage in September towards 41.6 percentage a yr in advance and 45.five percentage in June.

According to Kotak, pre-provision running income (PPoP) boom might be approximately 12 percentage YoY as commercial enterprise boom continues to be now no longer normal. Prabhudas Lilladher additionally expects the identical boom in PPoP.

Asset excellent

Analysts anticipate a fall in slippages at HDFC Bank with higher mortgage recuperation. Asset excellent is probably to enhance or stay solid as compared with the preceding zone.

“We anticipate the gross non-appearing mortgage ratio to decline, led via way of means of decrease slippages (2 percentage) and higher recuperation (anticipate a bullish observation of the recuperation environment). Near-time period recognition could be on boom recuperation of segments that might power this boom,” stated Kotak.

Asset excellent in agri/unsecured book, slippages because of the second one Covid-19 wave, and observation on credit score playing cards and charge profits traction are key, stated Motilal Oswal.