HDFC Bank reported a 20.9% on-year jump in consolidated net profit to Rs 9,579 crore in the April-June quarter, close to what analysts on Dalal Street had estimated. India’s largest private sector bank recorded a 14.5% jump in Net Interest Income (NII) to Rs 19,481 crore. Analysts had expected the lender to post robust quarterly earnings growth. The total credit cost ratio was at 0.91% as compared to 1.67% for the year-ago period. Gross NPAs were at 1.28% of gross advances in the April-June period as compared to 1.47% in the same period last year. HDFC Bank’s results show an improvement on an on-year basis, however, earnings have dipped sequentially as the April-June quarter is a seasonally weak quarter.
So far this year, HDFC Bank’s stock price is down 10.24%. On Friday the stock closed the day at Rs 1,364 per share.
The standalone net revenue of the Bank grew by 19.8% to Rs 27,181 crore. Total net revenue for the period under review, which includes net interest income and other income, was at Rs 25,869 crore. NII was higher driven by advances growth of 22.5% and deposit growth of 19.2%. The total balance sheet of the private lender grew by 20.3%. The core net interest margin of HDFC Bank was at 4% of total assets and 4.2% based on interest-earning assets.
HDFC Bank managed to add 36 branches and 10,938 employees during the first quarter of the financial year. The lender noted that the pre-provision operating profit was at Rs 15,367 crore. Provisions were reduced in the quarter, falling to Rs 3,187 crore from Rs 4,830 crore a year ago. The standalone net profit of the company was up 19% from Q1 of FY22 to Rs 9,196 crore.
The Bank’s total capital adequacy ratio as per Basle 3 norms was at 18.1% at the end of June this year, against the regulatory requirement of 11.7%. Along with GNPAs, which were lower at 1.28% of gross advances, net NPAs were at 0.35%, down from 0.5% a year earlier.
Domestic brokerage firm had expected HDFC Bank to report strong revenue growth. Motilal Oswal was projecting a 20% on-year jump in net profit and a 16.1% rise in NII. Axis Securities had expected a 14.7% rise in NII and a 19.6% jump in net profit. ICICI Direct had said it expects a 25.8% growth in net profit and a 12.9% jump in NII. All the above-mentioned brokerage houses have a buy rating on HDFC Bank scrip.