As India’s largest private sector lender HDFC bank As the brokerage is set to announce its financial results for the June 2022 quarter on Saturday, brokerage firms have given broad estimates of net profit growth of between 13.4 per cent and 32.4 per cent year-on-year. In addition to net profit, investors also need to pay attention to the commentary around asset quality, margins, net interest income, slippage and credit cards.
Global brokerage BNP Paribas expects HDFC Bank’s net profit to grow 13.4 per cent year-on-year to Rs 9,284.5 crore, with JP Morgan projecting a 32.4 per cent growth at Rs 10,232 crore. Domestic brokerage houses Emkay Global Financial Services and Motilal Oswal Financial Services expect profit after tax (PAT) to rise 20 per cent to Rs 9,280 crore.
HDFC Bank’s net profit is likely to decline between 1.5 per cent and 9 per cent on a quarterly basis.
On net interest margin, it said that net interest margin (NIM) is expected to improve on a quarterly basis, with a higher proportion of retail and a larger share of corporate loans booked at the end of Q4FY22.
On NII growth, ICICI Securities said, “After moderation at 10 per cent, NII growth is likely to be 14-15 per cent year-on-year. The bank is pursuing the best quality customers across product segments. It also offers high-yield payment products.” , will be offset by rural and commercial-led growth.”
On credit growth, Edelweiss Securities said the bank’s business was not upbeat with loan growth at a neutral level of 1.9 per cent on a quarterly basis. “But, its less-than-area credit growth is now in price.”
ICICI Securities also said that HDFC Bank’s credit growth is expected to remain strong at 21.6 per cent year-on-year at Rs 13.95 lakh crore. Deposit growth is expected to be around 19 per cent year-on-year and the CASA (current account, savings account) ratio is expected to be around 46 per cent.
Yes Securities in its report said HDFC Bank’s sequential credit growth is likely to remain moderate due to unknown aspects and the bank is bouncing back from the impact of the third wave of the pandemic in Q4FY22, somewhat offsetting the seasonal impact of Q1 Will do of the financial year.
“Sequential NII growth will be particularly healthy, with the yield on advances growing faster than the cost of deposits due to revaluation of external benchmark loans, implying net interest margin (NIM) expansion on a sequential basis,” it said.
Emkay Global also said, “HDFC Bank is likely to report healthy profitability led by better growth and limited credit cost. However, margins/fees may remain moderate.”
In the March 2022 quarter, HDFC Bank had reported a net profit of Rs 10,055.18 crore for the March 2022 quarter, a jump of 22.82 per cent as compared to Rs 8,186.51 crore a year ago. Its total income grew by eight per cent to Rs 41,085.78 crore during January-March 2022 from Rs 38,017.50 in the year-ago period.
The bank’s NII, interest earned, for the March 2022 quarter rose 10.2 per cent to Rs 18,872.7 crore as compared to Rs 17,120.2 crore a year ago.
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