For the September quarter, the lender’s net interest income (NII) rose 10% year-on-year to ₹30,114.9 crore, while its net profit rose 5.3% year-on-year to ₹16,821 crore.
This is also the first quarter the lender reported after the merger with HDFC, which was comparable year-on-year.
Asset quality remained stable with gross NPA at 1.36% from 1.33% last quarter, while its net NPA stood at 0.41% from 0.39% last quarter.
Brokerage firm Bernstein believes HDFC Bank appears almost immune to the problems faced by its peer lenders, such as declining net interest margins (NIM) and rising credit costs.
HDFC Bank’s net interest margin during the quarter stood at 3.46% from 3.47% in June and 3.4% during the year-ago quarter.
Bernstein noted that the September quarter results were close to pre-2020 results, when earnings yielded almost no surprises.
However, the brokerage believes that HDFC Bank has a big gap to bridge on both the return on assets (RoA) and growth front but seems to be making steady progress.
Bernstein has an ‘outperform’ rating on HDFC Bank with a target price of Rs 2,100 per share.
Goldman Sachs has a ‘buy’ rating on HDFC Bank with a target price of ₹2,156.
The brokerage said the second quarter saw better earnings visibility going forward and pre-core provisioning operating earnings return on assets (RoA) of 2.7% marked the second consecutive quarter of improvement.
Citi has maintained its ‘buy’ rating on the lender but has marginally lowered its target to ₹1,990 from ₹2,020. He said the lender is relatively better positioned to manage the retail stress cycle as well as the NIM trajectory.
It has lowered its loan growth estimates for HDFC Bank to 8% and 12% for financial years 2025 and 2026 compared to 11% and 14% and earnings estimates at 1% and 2% during the same period.
Of the 47 analysts covering HDFC Bank, 38 have a ‘buy’ rating, while nine have a ‘hold’ recommendation.
HDFC Bank shares ended 0.7% higher on Friday at Rs 1,684.8. The stock is stable so far this year, with losses of 0.8% so far.
First published: October 21, 2024 8:03 am IS
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