HDFC Bank is set to announce its financial results for the December quarter (Q3 FY25) on Wednesday.
Investors will be keeping a keen eye on the results as the stock of HDFC Bank has fallen 8.62% in the last month. HDFC Bank shares closed marginally below, falling 0.33% at Rs 1,645.75 in the last trading session.
India’s largest private sector lender is expected to report muted profit growth in its December quarter results, according to market analysts and brokerages. HDFC Bank might see net profit grow between 0-3%, with net interest income (NII) increasing by 6-8% year-on-year.
Financial solutions and broking services firm Axis Securities projects HDFC Bank to report a 2.2% year-on-year (YoY) rise in net profit at Rs 16,737 crore for the December quarter compared with Rs 16,373 crore in the same quarter last year.
Net interest income (NII) is expected to increase by 8.1% year-on-year, reaching Rs 30,778 crore compared to Rs 28,471 crore in the same period last year. Provisions are anticipated to rise 18.6% sequentially to Rs 3,203 crore from Rs 2,700 crore in the previous quarter, although this marks a 24% decline from Rs 4,217 crore in the corresponding period a year ago. The pre-provision operating profit is projected to stand at Rs 25,098 crore.
“Deposit growth was better than credit growth, LDR improved marginally; credit growth was significantly below the industry growth. Margins are likely to remain stable QoQ with a slight positive bias. Opex ratios are expected to remain steady. Slippages may remain under control. The management commentary on deposit accretion and resultant credit growth and Margin improvement trajectory will be watched,” it said.
Sharekhan, another leading brokerage, points out that while deposit growth has been encouraging, lending hasn’t kept pace with market trends. They forecast a slight dip in profits to Rs 16,264 crore.
The bank’s provision for bad loans might rise to Rs 3,203 crore, up 18.6% from the September quarter but significantly lower than last year’s figure of Rs 4,217 crore, according to market estimates.
Investors will closely monitor management comments on several key aspects during today’s earnings announcement.
Motilal Oswal Financial Services (MOFSL) projects HDFC Bank’s net profit to reach Rs 16,644 crore, marking a 1.7% year-on-year growth. The brokerage anticipates a 6.5% YoY increase in net interest income (NII) to Rs 30,335 crore. It also expects cost ratios to be well-managed and margins to remain largely steady.
Nuvama’s research suggests a marginal decline in net interest margins to 3.43% from last quarter’s 3.46%. However, they remain more optimistic about profit growth, projecting a 3.2% increase to Rs 16,900 crore.