The largest private sector lenders in India are expected to provide double-digit growth in profit and net interest income with stable asset quality and declining provisions for the quarter that ends December 2021.
HDFC stock prices on January 14 rose more than one percent in front of the quarterly income. It has registered more than 8 percent of the recent low profits on December 20, performed poorly from the benchmarks of the Nifty Bank and Nifty50 index which each increased by more than 11 percent and 9 percent, in the same period.
Earlier this month, HDFC Bank announced a temporary business number, said progress grew 16.4 percent year-on-year and 5.1 percent quarter to 12.6 lakh crore with the growth of retail loans at 13.5 percent yoy (up 4.5 Qoq percent) and the growth of corporate loan books at 7.5 percent yoy (up 4.5 percent Qoq).
Further bank said registered 13.8 percent yoy growth (up 2.8 percent qoq) in deposit at rs 14.46 lakh crore with casa deposits rose 24.6 percent yoy (up 3.5 percent qoq) to rs 6.81 lakh crore on the 2021 quarter. “The Casa Ratio stood around 47 percent as of December 31, 2021, compared with 43 percent in December 2020 and 46.8 percent on September 2021.”
“The growth of net interest income was seen at 12.7 percent yoy. We hope the margin is stable at 4.3 percent,” said ICICI Direct.
Institutional equity box estimates that NII’s growth of around 14 percent is led by loan growth. “Operating profit growth is around 12 percent yoy because of lower non-interest income growth. We hope that NIM does not change around 4 percent.”
In the six-month period the September 2021, the Bank has recorded a profit growth of 16.88 percent year-on-year at RS 16,564 Crore and net interest income grew by 10.3 percent to RS 34,693 Crore in the same period.
In sequence, the quality of assets increased in the September quarter with gross non-performance assets as a percentage of gross progress fell to 1.35 percent (against 1.47 percent in the June quarter) and NBS NPA declined to 0.4 percent (opposing 0.48 percent ). Experts expect stable asset quality with declining provisions in the December 2021 quarter.
“The quality of assets is expected to remain stable and gross non-performance assets at 1.3 percent. We expect provisions to decrease to RS 3,528 Crore. Thus, PAT growth is seen in 14 percent YoY,” said ICICI Direct.
The institutional equity box estimates that the gross non-performing loan ratio (NPL) decreases to lower slippages (2 percent) and better recovery (expect bullish comments from the recovery environment). “The short-term focus is on the recovery of growth, the segment will encourage this growth and the prospect of margins,” said the broker who saw 17.2 percent of profit growth.
Asset quality, multiples, and comments around credit cards and traction cost income are important things to note.
