HDFC Bank third quarter profit reaches 7,818 crore
MUMBAI : Private sector lender HDFC Bank is expected to post a net profit of ??7,818.2 crore in the three months to December, 5% more than ??7,416.48 crore reported in the same period last year, based on an average of estimates from 15 analysts polled by Bloomberg.
The bank will release its third quarter FY21 results on Saturday.
Analysts from Emkay Research said that HDFC Bank’s overall business momentum remains healthy, relative to the industry. A structurally better cost-to-income ratio and a high provisioning buffer (0.7% of second-quarter loans) should help absorb the subsequent moderate asset quality risk, leading to consistently healthy yield ratios, a he declared.
“However, following a wave of recent churns and adverse events, including malpractice in the automotive industry and the suspension of new card acquisition, we believe the new management has a job to do for overcome those hurdles and maintain its historic management premium, “Emkay said in a Jan. 6 report.
HDFC Bank recently informed the exchanges that its loan portfolio grew by around 16% year-on-year (year-on-year) to ??$ 10.8 trillion in the third quarter of FY21, which Emkay said was mainly due to retail (festive recovery) and continued momentum in business lending working capital.
ICICI Direct said on January 8 that HDFC Bank is expected to report net interest income (NII) of ??16,258.8 crore in the December quarter, up 12.8% year-over-year.
“We expect margins to be stable at 4.3%. Other income could see sequential improvement with 10% year-on-year after-tax profit growth expected to ??8,205 crores. Asset quality may be stable due to a weaker slide driven by the status quo, but the restructuring numbers are one to watch, ”said ICICI Direct.
Meanwhile, analysts at Motilal Oswal believe HDFC Bank has shown strong traction in the corporate portfolio, offsetting weakness in personal lending.
“In the first half of FY21, the corporate segment fully contributed to overall lending growth, bringing its share to 52% of total lending. It continues to focus on top-rated corporate loans, which has resulted in a sharp drop in risk-weighted assets / total assets to around 65% (down from 75% in FY2019), ”a Motilal Oswal declared Jan. 7.
HDFC Bank shares closed at ??1,466.35 on BSE on Friday, down 0.12% from its previous close.
Never miss a story! Stay connected and informed with Mint. Download our app now !!