HDFC Bank Q2 Results Preview: HDFC Bank, the largest private sector lender in India, will announce its financial results for the second quarter of FY25 on Saturday, October 19. HDFC Bank’s merger with its parent HDFC led to inherited high-cost deposits, which the bank is systematically replacing with lower-cost options.
While the profitability of HDFC Bank is anticipated to remain steady, net interest margin (NIM) is expected to recover gradually.
Here’s what to expect from HDFC Bank Q2 results 2024:
Net Interest Income
HDFC Bank is expected to report net interest income (NII), or the difference between interest earned and interest paid, of ₹30,133 crore in the quarter ended September 2024, registering a growth of 10% from ₹27,385 crore in the year-ago quarter, according a poll of five brokerages by Livemint.
The bank’s NII is projected to grow by 1% from ₹29,837 crore in the June quarter.
“NII growth is estimated to be in-line with average loan growth as the rise in yield on advances to be in tandem with rise in cost of deposits. Consequently, net interest margin (NIM) will be stable sequentially,” Yes Securities said.
Analysts expect net interest margin to remain stable sequentially with a slight positive bias.
Profit
Net profit of HDFC Bank in Q2FY25 is expected to rise 2.73% to ₹16,413 crore from ₹15,977 crore, year-on-year (YoY).
Pre-provision operating profit (PPOP) during the quarter is likely to grow 7.76% to ₹24,455 crore from ₹22,694 crore, YoY.
Asset Quality and Provisions
Asset quality is expected to remain broadly stable, with Gross Non-Performing Assets (GNPAs) and Net NPAs projected at 1.3% and 0.4%, respectively.
Operating expenses (Opex) growth is anticipated to marginally trail behind business growth. Slippages are likely to remain steady, and provisions are expected to remain flat on a sequential basis.
Motilal Oswal forecasts that HDFC Bank’s cost ratios will remain well-managed, with margins remaining stable and showing a slight positive bias. The bank is projected to achieve a 13.7% YoY growth in deposits, accompanied by a 7.9% YoY loan growth.
Going ahead, analysts expect guidance for business growth and earnings trajectory to be the key monitorables. Moreover, HDFC Bank’s management commentary on Deposit accretion and resultant credit growth and margin improvement trajectory hereon will be watched out for in HDFC Bank Q2 results.
HDFC Bank Stock Price
HDFC Bank share price has failed to give any significant returns recently as the stock is up by over 4% in the past three months and more than 12% in six months. However, HDFC Bank shares have fallen over 1% year-to-date (YTD). In the past one year, HDFC Bank stock has gained nearly 11%.
On Friday, HDFC Bank shares ended 0.47% higher at ₹1,681.15 apiece on the BSE.
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