HDFC Bank Q3 results preview: All eyes on slippages in auto, agri sectors

NEW DELHI: Private lender HDFC Bank is likely to report over 20 per cent year-on-year rise in December quarter profit on Saturday.

Credit growth is seen at 16-20 per cent, as retail loan growth may moderate a bit. Net interest margin (NIM) is likely to come in 4.2-4.3 per cent. Asset quality may stay strong, but slippages in auto and agriculture sectors will be keenly tracked, said analysts.

Motilal Oswal expects the bank to report a 24 per cent YoY jump in profit to Rs 6,950 crore. The brokerage expects asset quality to remain steady with gross non-performing assets (GNPAs) and net NPAs likely at 1.40 per cent and 0.44 per cent, respectively.

Edelweiss Securities sees credit growth at 20 per cent on the back of recovery in corporate loans. It expects HDFC Bank’s retail business to grow in 16–18 per cent range.

“Deposits may register 26 per cent growth due to market share gains, focus will remain on CASA and retail term deposits. Core revenue momentum is likely to be 16–18 per cent with steady NIMs at 4.2–4.3 per cent, though fee income is a key monitorable, it said.

Sharekhan expects the bank to report 15.7 per cent rise in net interest income (NII) at Rs 14,548.80 crore and 29.7 per cent rise in profit at Rs 7,244.50 crore.

Reliance Securities said operating efficiencies and lower tax rates will boost the bank’s profit by 21.7 per cent to Rs 6,799 crore. The brokerage sees NIM at 4.25 per cent compared with 4.2 per cent in the September quarter and 4.3 per cent in the year-ago period.

“We expect loan growth to slow down to 17 per cent resulting in slower NII growth at 12 per cent YoY. Retail loan growth slowdown is on account of weak volume growth in auto though the share of unsecured portfolio would remain high. Fee income growth from MFs will be slower due to changes in regulations while asset and payment fees will grow at a slower rate,” said Kotak Securities.