Back
PremiumHDFC Bank Q2 Results Highlights: HDFC Bank, the largest private sector lender in the country, announced its earnings for the second quarter of FY24 on Monday, 16 October, 2023. This is the first quarterly financial result of HDFC Bank after it was merged with mortgage lender Housing Development Finance Corporation (HDFC) effective July 1. The bank reported an on-year rise in its net profit and net interest income in Q2FY24.
HDFC Bank Q2 Results Live: Here are the key highlights of the fiscal results declared by the lender for the September 2023 quarter
HDFC Bank Q2 Results Live: The total balance sheet as of September 2023 stood at ₹34,16,310 crore, as against ₹22,27,893 crore in the year-ago period. Total deposits grew 29.8 percent on-year to ₹21,72,858 crore, and the capital adequacy ratio came in at 19.5 percent as of September 30, 2023, as compared to 18 percent in the year-ago period.
HDFC Bank Q2 Results Live: The bank in a release said its consolidated net revenue grew by 114.8 percent to ₹b66,317 crore in Q2FY23 from ₹30,871 crore in the year-ago period. “The consolidated profit after tax for the half year ended September 30, 2023 was ₹29,182 crore, up 40.9%, over the half year ended September 30, 2022," it added.
HDFC Bank Q2 Results Live: The gross non-performing assets of the lender jumped to 1.34 percent in Q2FY23, as against 1.17 percent in the preceding June 2023 quarter. Similarly, the net NPA climbed to 0.35 percent from 0.30 percent in the preceding quarter.
HDFC Bank Q2 Results Live:The lender's operating profit in the September 2023 quarter came in at ₹22,694 crore, marking a 30.5 percent on-year jump. The bank's CASA ratio stands at 37.6 percent.
HDFC Bank Q2 Results Live: Contrary to the expectations that the NII may shrink following the merger withy parent entity, HDFC Bank has reported a 6.7 percent on-year jump. The NII came in at ₹27,385 crore, as against the pre-merger period of Q2FY23 when it stood at ₹26,660 crore.
HDFC Bank Q2 Results Live: The net profit is up 6 percent as against the pre-merger period of Q2FY23, when the lender had posted a net profit of ₹15,060 crore.
HDFC Bank Q2 Results Live: HDFC Bank’s net profit in Q2FY24 has come in at ₹15,980 crore, whereas, the private lender's net interest income for the quarter stood at ₹27,385 crore.
HDFC Bank Q2 Results Live: Net profit rises to ₹15,980 crore
HDFC Bank Q2 Results Live: Ahead of the release of HDFC Bank's quarterly results, the bank's share on the NSE were valued at ₹1,532 apiece, down by 0.24 percent as against the previous day's close. On the BSE, the dip was a bit sharper, as the shares were priced at ₹1,529.5 apiece, marking a decline of 0.47 percent as compared to the last closing price.
HDFC Bank, which is considered to have been weight down by the amalgam with its parent entity, may report a shrink in the net interest margin to 3.5 percent, as per Jefferies India. The brokerage firm is expected to keep a tab on management's views on integration of HDFC Life.
Brokerage firm Motilal Oswal estimates private banks (excluding HDFC Bank) to report PPoP growth of ~18% YoY (flat QoQ) and PAT growth of ~25% YoY (flat QoQ) in 2QFY24. Earnings are poised to remain healthy, supported by healthy business growth and benign credit costs, but margin compression and elevated opex may pose challenges to the overall growth trajectory.
HDFC Bank share price continues to trade under pressure ahead of the release of September quarter earnings. HDFC Bank shares were trading 0.29% lower at ₹1,532.35 apiece on the BSE, at 2:15 pm.
HDFC Bank’s credit cost is expected to drop to 0.56% in Q2FY24 from 0.72% in Q2FY23 and 0.59% in Q1FY24. Asset quality is expected to improve as gross NPA ratio is likely to fall by 6 bps to 1.34% from 1.40% sequentially.
Large private banks could see loan growth of 4.3% QoQ and 16.0% YoY versus ~15% YoY for the system. Deposit growth is expected to be 4.3% QoQ/18.6% YoY (last quarter 2.4%/17.2%). We see NII fall of 3.3% QoQ and NIM might decline by 34bps to 4.1% due to lag effect of deposit cost given deposit rate hikes across banks were much steeper in H2FY23. Fees and opex would mirror each other in terms of quarterly accretion (+3%). Core PPoP may come in at ₹479 billion (-5.6% QoQ). Provisions would largely remain stable QoQ at 62ps while core PAT could dip by 6.9% QoQ to ₹307 billion, according to brokerage firm Prabhudas Lilladher.
Yes Securities upgraded HDFC Bank to ‘Buy’ with an unchanged price target of ₹1,950 per share, but it is still not one of its top picks. On a like-for-like basis, sequential loan growth has been 4.9%. NII growth will be materially slower than loan growth due to cost of deposits catch up and excess liquidity. Consequently, NIM will be materially lower sequentially. Sequential fee income growth will broadly match loan growth. Opex growth will slightly lag loan growth. Slippages would be broadly stable on sequential basis. Provisions will be broadly stable due to prudential provisioning, it said.
Federal Bank reported a 35.6% rise in Q2FY24 net profit at ₹954 crore from ₹703.7 crore in the year ago period. The bank’s net interest income (NII) increased by 16.7% to ₹2,056.4 crore from ₹1,761.8 crore, YoY.
Provisions were down to ₹43.9 crore from ₹267.9 crore YoY and from ₹155.6 crore, QoQ Slippages were at ₹373 crore versus ₹501 crore, QoQ. Net Interest Margin was at 3.16% from 3.15%, QoQ.
The RBI has repeatedly fired warning shots amid runaway unsecured loan growth, including PL (particularly for a few players), and reiterated its intention in its recent monetary policy to intervene in the absence of voluntary discipline, including strengthening internal surveillance and safeguards. We, hereby, evaluate the possible interventions, which we believe could not only hurt growth but also the profitability/capital ratios of the Regulated Entities (REs) though in a limited way, Emkay Global said.
Our discussion with the bankers suggests that the RBI may not want to derail festive growth and, thus, possibly could initiate some action, if any, post the festive season depending on the voluntary steps taken by the REs in the interim period. If not satisfied, the RBI’s action could manifest via increasing standard asset provisions on unsecured loans (mainly Cards/PL/CD) by around 50bps or increasing capital cost via a 25% increase in risk weight (RWA) on overall unsecured loans as of FY24E/incremental loans over FY22-FY24E, it added.
HDFC Bank share price traded lower Monday afternoon ahead of the release of Q2 results later today. HDFC Bank shares made an intraday low of ₹1,522.00 apiece, falling 0.95% from previous close of ₹1,536.75 apiece on the BSE. The stock was trading 0.39% lower at ₹1,530.80 per share.
For HDFC Bank, Q2 could be a bottoming out quarter and should be a key beneficiary of margin recovery from Q3, which coupled with reasonable valuations among peers should drive up the stock, Emkay Financial Services said.
Higher deposit growth coupled with merger/regulatory drag should weigh on margins and, thus, profitability. The bank is expected to report higher NPAs on a merged basis, it added.
HDFC Life Insurance Company on Friday reported a consolidated net profit of ₹378 crore for the second quarter of FY24, registering a growth of 15% from ₹329 crore in the same quarter last fiscal.
The company’s net premium income in Q2FY24 increased 13% to ₹14,797 crore from ₹13,138 crore in the year-ago period. Read here
Kotak Institutional Equities expects HDFC Bank’s Q2 net profit to rise 44.5% YoY to ₹15,326.9 crore, while net interest income (NII) to grow 40% YoY to ₹29,428.5 crore. It expects gross NPL ratio to be marginally higher as reported in the merged balance sheet. Near-term focus would be the progress of NIM and the impact of PSL (FY2025).
Q2FY24 will be the first quarter post the merger and thus, there is likely to be a fair degree of volatility over our estimates. Key variables to watch: (1) opening cost of funds, (2) yield on loans and (3) impact of ICRR to understand the NIM profile of the merged entity, the brokerage said.
The Bank Nifty index traded 0.2% lower on Monday ahead of the announcement of Q2 results by HDFC Bank later today. The major laggards on the Bank Nifty today were AU Small Finance Bank, IndusInd Bank, HDFC Bank, Kotak Mahindra Bank and ICICI Bank that declined between 0.2% to 1.5%.
On the flip side, Bandhan Bank, Axis Bank, Punjab National Bank, Federal bank, among others were the top gainers on the index.
HDFC Bank Q2 net profit is estimated to rise 53.6% YoY to ₹16,292.5 crore, while net interest income (NII) may grow 40.6% YoY to ₹29,552.5 crore. Pre-provision operating profit (PPOP) is expected to jump 42.2% to ₹24,737.5 crore, as per Yes Securities.
Sequential loan growth has been 4.9%. NII growth will be materially slower than loan growth due to cost of deposits catch up and excess liquidity. Consequently, NIM will be materially lower sequentially. Sequential fee income growth will broadly match loan growth. Opex growth will slightly lag loan growth. Slippages would be broadly stable on sequential basis. Provisions will be broadly stable due to prudential provisioning, it said.
The July-September quarter (Q2) earnings of the Indian banking sector may show decent growth on a year-on-year (YoY) basis with private and PSU banks likely to post earnings growth of about 25 per cent and 20 per cent YoY, respectively, even though there could be some compression in net interest margin (NIM), said a report from Motilal Oswal Financial Services.
Apart from the numbers, management commentaries on unsecured loan growth and margins, traction in deposits and opex trends, the traction in fee income and treasury outlook are expected to be in focus in the banking sector's Q2 scorecard. Read here
HDFC Bank’s deposits aggregated to approximately ₹21.73 lakh crore as of September 30, 2023, a growth of around 29.9% over ₹16.73 lakh crore as of September 30, 2022.
The bank’s current account and savings account (CASA) deposits in Q2FY24 rose 7.6% to approximately ₹8.17 lakh crore from ₹7.59 lakh crore last year. CASA ratio stood at around 37.6% compared to 45.4% last year.
HDFC Bank reported a robust 57.7% growth in its gross advances at ₹23.54 lakh crore as of September 30, 2023, rising from ₹14.93 lakh crore last year. The bank’s domestic retail loans grew by around 111.5% year-on-year (YoY), while commercial & rural banking loans grew by around 29.5% YoY and corporate & other wholesale loans grew by 8% YoY, HDFC Bank said in a regulatory filing on October 4.
The lender said that after the merger with the parent company HDFC Ltd, the bank reported highest ever home loan disbursals at around ₹48,000 crore.
This is a growth of 14.0% over the quarter ending June 30, 2023, and a growth of 10.5% over the quarter ending September 30, 2022, it added. Non-individual loans of the erstwhile HDFC Limited (eHDFCL) aggregated to approximately ₹1.02 lakh crore as of September 30. Read here
HDFC Bank shares have remained one of the worst performing banking stocks this year. HDFC Bank share price has fallen 8% in the last one month, while it has fallen 7% in three months. The stock is down over 6% year-to-date (YTD).
In the last one year, HDFC Bank shares have gained over 6.3% and risen over 27% in three years.
HDFC Bank’s loan growth is expected to be robust, growing by 4.9% QoQ led by other retail and CRB portfolios. However, net interest income (NII) could decline 4.9% due to lower yields leading to pre-provision operating profit (PPoP) fall of 8.2% QoQ. We expect net interest margin (NIM) to decline by 41 bps on account of additional liquidity due to the merger. GNPAs could see an improvement of 6 bps QoQ to 1.34% while we expect provisions to remain flat, brokerage firm Prabhudas Lilladher said.
It sees HDFC Bank’s Q2FY24 net profit at ₹13,640.8 crore, NII at ₹27,358.3 crore and NIM at 3.62%.
HDFC Bank share price opened lower on Monday ahead of the announcement of Q2 earnings later today. HDFC Bank shares opened at ₹1,536.70 apiece on the BSE as compared to Friday’s close of ₹1,536.75. However, the stock witnessed selling pressure and was trading over half a percent lower. HDFC Bank shares were trading 0.74% lower at ₹1,525.35 apiece.
On a like-for-like basis, HDFC Bank's sequential loan growth has been 4.9%. Net Interest Income (NII) growth will be materially slower than loan growth due to cost of deposits catch up and excess liquidity. Consequently, NIM will be materially lower sequentially. Sequential fee income growth will broadly match loan growth. Opex growth will slightly lag loan growth. Slippages would be broadly stable on a sequential basis. Provisions will be broadly stable due to prudential provisioning, according to Yes Securities.
According to Emkay Global Financial Services, HDFC Bank is expected to be hurt by sharp margin contraction post the merger. Higher deposit growth coupled with merger or regulatory drag should weigh on margins and, thus, profitability. The bank is expected to report higher NPAs on a merged basis, Emkay Global said.
As per the brokerage, HDFC Bank may report net profit of ₹15,279.2 crore, net interest income of ₹27,874 crore and net interest margin of 3.8% in Q2FY24.
HDFC Bank share price will remain in focus on Monday ahead of the announcement of September quarter results. HDFC Bank, the largest private sector lender in the country, is set to announce its earnings for the second quarter of FY24 today, 16 October, 2023.
HDFC Bank share price has fallen over 5% year-to-date (YTD) and is down more than 6% in the last one month. On Friday, HDFC Bank shares ended 0.85% lower at ₹1,536.75 apiece on the BSE. Read here
The overall banking sector is expected to see healthy credit growth in the quarter ended September, but margins are likely to compress due to cost catch-up and the impact of Incremental Cash Reserve Ratio (ICRR).
Analysts expect the creation of excess liquidity could affect the net interest margin of HDFC Bank in Q2FY24. However, margins should bounce back in H2FY24 as credit growth picks up and liquidity is utilized. Read full report here
Creation of excess liquidity could affect Q2FY24 net interest margin (NIM), although margins should bounce back in H2FY24E as credit growth picks up and liquidity is utilized, brokerage firm Prabhudas Lilladher said. While core earnings growth would be muted for FY24E (3.5% YoY), as NIM and loan growth normalize core PAT may witness a 20.7% CAGR over FY24-26E.
HDFC Bank is expected to be hurt by sharp margin contraction post the merger, Emkay Global Financial Services said.
“After a sharp margin downtrend in the past two quarters, the bank expects margin contraction to be contained in Q2. This coupled with contained provisions is expected to support profitability. Slippages are likely to remain largely flat QoQ; there are no signs of incremental stress as of now," Emkay Global said.
HDFC Bank’s net interest income in Q2FY24 is estimated at ₹27,874 crore, up 8.6% YoY and down 3.6% QoQ. Net interest margin (NIM) is expected to be at 4.1%, down 5 bps sequentially and up 9 bps YoY. The bank is likely to post a net profit of ₹6,045 crore in the September quarter.
HDFC Bank, the largest private sector lender in the country, is set to announce its earnings for the second quarter of FY24 on Monday, 16 October, 2023. This will be the first quarterly financial result of HDFC Bank after it was merged with mortgage lender Housing Development Finance Corporation (HDFC) effective July 1.
