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HDFC Bank Q1 preview: Profit may grow 28%, NIM seen stable at 4.3%

NEW DELHI: HDFC Bank is likely to report 18-28 per cent rise in net profit for the June quarter on double-digit growth in net interest income (NII). The private lender may make lesser provisions sequentially and is likely to log a stable net interest margin (NIM) at 4.3 per cent. Investors would keenly follow the management commentary on the growth outlook and on the timeline for the lifting of the credit card ban.

To recall, the private bank in its Q1 update had suggested a 14.4 per cent YoY growth in credit growth at Rs 11,47,500 crore for the June quarter, which was way higher than the system’s 5.5 per cent growth. Retail loans exoanded 10.5 per cent while corporate loans grew 17 per cent on a yearly basis. Deposit during the quarter rose 13 per cent YoY, while the Casa ratio stood at 46 per cent.

ICICIdirect expects HDFC Bank to report 27.8 per cent YoY rise in profit at Rs 8,511.30 crore on a 9.7 per cent rise in NII at Rs 17,191 crore. Pre-provision profit is seen rising 19.7 per cent to Rs 15,356 crore.

The brokerage expects margins to be stable at 4.3 per cent. “Other income is expected to moderate sequentially due to partial lockdowns. Asset quality is expected to be stable with the gross non-performing assets (NPA) ratio likely at 1.35 per cent (net NPA at 0.42 per cent). We expect provision to moderate to Rs 3,902 crore,” ICICIdirect said.

Phillip Capital sees profit growing 20.4 per cent YoY to Rs 8,020 crore. NII is seen rising 11.5 per cent to Rs 17,464 crore. NIM is seen at 4.35 per cent for the June quarter against 4.2 per cent in the March quarter and 4.3 per cent in the year-ago quarter. The likely sequential rise in NIM would be on account of lesser interest reversal, it said.

Opex growth will continue to be lower than balance-sheet growth. The commentary on retail asset quality will be watched. Total loan-related provision is expected to remain at 2.1 per cent of the loan book,” it said.

Nirmal Bang pegged profit at Rs 7,828 crore, up 17.6 per cent. It sees NII at Rs 18,072 crore, up 15.4 per cent. The brokerage sees NIM at 4.2 per cent and credit cost at 1.5 per cent, down 9 basis points YoY.

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