As India’s largest private sector lender HDFC Bank is set to announce its financial results for the June 2022 quarter on Saturday, brokerage firms have given wide-ranging estimates of net profit growth between 13.4 per cent and 32.4 per cent, on a year-on-year basis. Apart from net profit, investors also need to look at asset quality, margin, net interest income, slippages and commentary around credit cards.
Global brokerage BNP Paribas expects HDFC Bank’s net profit to grow 13.4 per cent y-o-y to Rs 9,284.5 crore, JPMorgan estimates the growth at 32.4 per cent to Rs 10,232 crore. Domestic brokerage houses Emkay Global Financial Services and Motilal Oswal Financial Services expect profit after tax (PAT) to jump 20 per cent to Rs 9,280 crore.
On a quarterly basis, HDFC Bank is likely to post a decline in its net profit between 1.5 per cent and 9 per cent.
On net interest margin, it said net interest margin (NIM) is expected to improve on a quarterly basis, with a higher proportion of retail and a large part of corporate loans booked at the end of Q4FY22.
On the NII growth, ICICI Securities said, “Post moderation to 10 per cent, NII growth is likely to retrace to 14-15 per cent y-o-y. The bank is chasing the best quality customers across product segments. This will be offset by growth led by high-yielding payment products, rural and commercial.”
On loan growth, Edelweiss Securities said the bank’s business update was not enthusing with loan growth at an uninspiring level of 1.9 per cent on a quarterly basis. “But, its lower-than-sector loan growth is now priced in.”
ICICI Securities also said HDFC Bank’s credit growth is expected to remain strong at 21.6 per cent y-o-y to Rs 13.95 lakh crore. Deposit growth is expected at 19 per cent on a yearly basis and CASA (current account, saving account) ratio is likely to be at around 46 per cent.
YES Securities in its report said HDFC Bank’s sequential loan growth is likely to be moderate due to idiosyncratic aspects and the bank bouncing back from the impact of the third wave of the pandemic in Q4FY22, which would somewhat offset the seasonal impact of a tepid first quarter of the financial year.
“Sequential NII growth would be particularly healthy given yield on advances would have evolved faster than cost of deposits due to repricing of externally benchmarked loans, implying net interest margin (NIM) expansion on sequential basis,” it said.
Emkay Global also said, “HDFC Bank is likely to report healthy profitability led by better growth and contained credit cost. However, margin/fees may remain soft.”
In the March 2022 quarter, HDFC Bank had reported a standalone net profit of Rs 10,055.18 crore for the March 2022 quarter, a jump of 22.82 per cent as compared with Rs 8,186.51 crore a year ago. Its total income jumped eight per cent to Rs 41,085.78 crore during January-March 2022, against Rs 38,017.50 in the year-ago period.
The bank’s NII, interest earned minus interest expended, for the March 2022 quarter had grown 10.2 per cent to Rs 18,872.7 crore, compared with Rs 17,120.2 crore a year ago.
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