HDFC Bank Q2 results preview: PAT may rise 2% YoY; margins to be stable

Leading private sector lender is expected to report subdued growth in its bottomline for the September quarter, dragged down by weak loan growth, reflecting the underlying changes that the bank is undertaking to improve the credit-to-deposit ratio.

Net profit for the second quarter is likely to rise by marginal 2% year-on-year, according to an average estimate of five brokerages. Meanwhile, net interest income for the same period may jump 11% year-on-year.

The bank reported 7% growth in its gross advances, amounting to Rs 25.19 lakh crore in the September quarter. The lender also recorded an 8% YoY increase in CASA (Current Account Savings Account) deposits, reaching Rs 8.83 lakh crore.

Key monitorables for investors include management commentary on deposit accretion and resultant credit growth.

In the preceding June quarter, the bank reported a standalone net profit of Rs 16,175 crore, which was up by 35% year-on-year. The NII for the quarter rose around 26% year-on-year to Rs 29,840 crore.

Kotak Equities

The headline reported numbers were weaker on loan growth (8% YoY). The CD ratio has improved QoQ to 100% (from 103% earlier). Deposits grew 15% YoY. NIM to be flat/marginally positive QoQ.

We expect the gross NPL ratio to be stable. Near-term focus would be the progress of NIM (expect a positive outlook for the medium term) and look to understand the impact of PSL (FY2025).

Motilal Oswal

Expect cost ratios to remain under control. Margins to remain broadly stable, will have a positive bias. Asset quality is likely to remain broadly stable. Guidance for business growth and earnings trajectory to be the key monitorables.

Prabhudas Lilladher

Loan would grow by 1.3% QoQ due to an added focus on LDR. NII could grow by 4.3% QoQ. Margins may be maintained at 3.71%. PPoP could increase by 4.3% due to higher NII and other income. Provisions could increase by 15% due to ageing and prudent accounting practices

Nuvama

NII is likely to grow 2.7% QoQ / 11.9% YoY. Margins could improve by 3bp QoQ/ 10bp YoY. Trading gains will be lower QoQ. Loan and deposit growth is likely to be at 2% and 5% respectively.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)