HDFC Bank to report Q2 results today; here's what experts say

NEW DELHI: HDFC Bank is all set to report its September quarter results on Saturday. Analysts largely expect the private lender to post strong loan growth for the quarter. Profit growth is seen in the range of 17-21 per cent. Asset quality is expected to remain stable, but analysts expect margins to contract due to a rise in cost of funds.

Brokerage Motilal Oswal Securities is factoring in a loan growth of 20 per cent, mainly driven by retail loans. It expects deposit growth to come in around 21 per cent YoY led by traction in CASA and bulk deposits.

“Calculated margins at 4.1 per cent are expected to contract due to a rise in cost of funds. NII is expected to grow at 13 per cent YoY. Other income growth is expected to moderate to 11 per cent YoY, factoring on lower trading gains. Fee income should remain healthy, the brokerage said.


Prabhudas Lilladher expects the bank to continue to report steady earnings growth of 20 per cent YoY on benefits from capital raising and lower bond losses.

“Loan growth is expected at 24 per cent YoY but NII growth should be 18-19 per cent as NIM headwinds are not over yet and historical book is to get repricing benefit,” this brokerage said.

Loan growth to likely gain traction implying continued market share gains. "Core revenue momentum will likely improve (fee income is a key monitorable). Asset quality trend will likely remain benign," said Edelweiss Securities.

Motilal Oswal Securities estimates gross non-performing assets (NPAs) at 1.3 per cent and profit after tax at Rs 4,920 crore, up 18 per cent YoY.
Opex growth would be lower than total income growth at 8.5 per cent YoY, aided by the bank's strong digital initiatives, it said.

The performance of retail and agri portfolios, especially commercial vehicle (CV) and construction equipment (CE) segments, and trends in digital banking payments will be keenly followed, say brokerages.

The scrip on Friday closed at Rs 1,965.80 on BSE, down 0.46 per cent.