HDFC Bank Q3 preview: Analysts expect mid-teen growth in NII, profits

NEW DELHI: Analysts expect 12-18 per cent year-on-year growth in net profit and 11-17 per cent growth in net interest income for HDFC Bank during the December quarter. This is slightly lukewarm given the company is reputed to deliver 20 per cent growth every quarter.

The largest private lender in the country will be the first banking institution to report its quarterly numbers on Saturday. Traders will be watchful as it will also set the tone for the sector. Given the worsening pandemic asset quality of the bank, which is among the best in the industry, will also be under watch.

“Slippages should decline somewhat on a sequential basis due to underlying factors. Considering all factors, net interest margin should be flat to slightly higher on a sequential basis,” said analysts at YES Securities.

“Fee income should rise in reasonably healthy fashion due to improved business activity and payment transactions during the festival season. Expenses would rise sequentially as dictated primarily by increased business activity. Provisions would decline meaningfully on a sequential basis.”

Phillip Capital said its credit growth was strong at 16.4 per cent year-on-year. Deposit grew by 13.8 per cent year-on-year. Net interest margins (NIM) will likely increase sequentially due to improvement in C/D ratio, the broker said.

“Stable asset quality and credit cost will continue to aid profitability. Opex growth will continue to be lower than balance-sheet growth,” Phillip Capital added.

Sharekhan said advances are likely to grow by 5 per cent QoQ. NIM to remain stable at 4 per cent.

Key monitorable would be growth in the business segments and its outlook.