HDFC Bank Q2 results preview: Muted qtr expected; loan-deposit ratio eyed

HDFC Bank share price: Ahead of the Q2 results, HDFC Bank share price gained 2.8 per cent during the three months to September

HDFC Bank Q2 results preview: HDFC Bank, India's biggest lender, is expected to report flat July-September quarter (Q2) results for the current financial year 2024-25 (FY25), according to analysts.

Most brokerages assessed by Business Standard expect HDFC Bank's Q2 FY25 net profit to vary +/- 2 per cent over last year's (Q2 FY24) net profit of Rs 15,976.1 crore. Sequentially, it would be nearly flat over profit of Rs 16,174.8 crore seen in the June quarter (Q1) of FY25.

The date for HDFC Bank to report its Q2 results for 2024 has been fixed as Saturday, October 19, 2024.

Meanwhile, ahead of the Q2 results, HDFC Bank share price gained 2.8 per cent during the three months to September. By comparison, the BSE Sensex added 6.6 per cent during the September quarter.

 

Thus far in financial year 2024-25, HDFC Bank shares have surged 17.4 per cent on the BSE, compared to the Sensex's 10.6-per cent rally.

HDFC Bank share price today was Rs 1,671.45 per share (down 1.7 per cent) at 11:40 AM, as against the Sensex's 0.5 per cent fall. 

Here are HDFC Bank Q2 results 2024 expectations by brokerages:

Nomura

Global brokerage Nomura pegs HDFC Bank Q2 profit at Rs 15,850 crore, down 1 per cent year-on-year (Y-o-Y) and 2 per cent quarter-on-quarter (Q-o-Q). Operationally, it sees the pre-provision operating profit (PPOP) at Rs 23,990 crore (core PPOP at Rs 23,490 crore), up 6 per cent Y-o-Y but flat Q-o-Q.

In Q2 FY24, HDFC Bank's PPOP was Rs 22,690 crore, with core PPOP at Rs 21,650 crore. In Q1 FY25, it was Rs 23,880 crore with core PPOP at Rs 23,660 crore.

On similar lines, Nomura expects HDFC Bank's net interest income (NII) to grow 9 per cent Y-o-Y and 0 per cent Q-o-Q at Rs 29,810 crore.

That said, the brokerage sees net interest margin (NIM) expansion of 10 basis points Y-o-Y and 3bps Q-o-Q.

Prabhudas Lilladher

Sharing one of the most optimistic forecasts, Prabhudas Lilldher expects HDFC Bank's Q2 NII to jump 13.6 per cent Y-o-Y and 4.3 per cent Q-o-Q to Rs 31,111.2 crore.

This compares to a NII of Rs 27,385.2 crore seen in Q2 FY24 and Rs 29,837.1 crore seen in Q1 FY25.

Effectively, it sees PPOP at Rs 24,910.8 crore, up 9.8 per cent Y-o-Y and 4.3 per cent Q-o-Q. At the bottom line, the net profit is seen growing 4.3 per cent Y-o-Y and 3 per cent Q-o-Q to Rs 16,658 crore.

"Loan book growth could be muted at 1.3 per cent Q-o-Q/7 per cent Y-o-Y to Rs 24.95 trillion due to an added focus on loan-deposit ratio (LDR). NIM may be maintained at 3.71 per cent. Provisions, however, could increase by 15 per cent Q-o-Q/3 per cent Y-o-Y to Rs 2,992.4  crore due to ageing and prudent accounting practices," the brokerage said.

On the asset quality front, Prabhudas Lilladher expects HDFC Bank's Q2 gross non-performing assets (GNPAs) ratio to improve Q-o-Q at 1.28 per cent from 1.33 per cent.
 

It, however, sees credit costs rising 6bps sequentially, but down 2 bps Y-o-Y, to 0.48 per cent.

Sharekhan

Sharekhan, too, expects HDFC Bank's September quarter profit to see a tepid growth of 1.6 per cent Y-o-Y/0.3 per cent Q-o-Q to Rs 16,228 crore.f

PPOP may rise 7.4 per cent Y-o-Y/2 per cent Q-o-Q to Rs 24,369 crore, while NII may rise 9.8 per cent Y-o-Y/0.8 per cent Q-o-Q to Rs 30,079 crore.

"Asset quality is expected to remain broadly stable with NIMs likely to be flat Q-o-Q. Key monitorable would be the progress of NIMs, and loan/deposit growth outlook," Sharekhan said.

Kotak Institutional Equities

HDFC Bank's pre-quarter update on loans and deposits showed that loan growth was around 7 per cent Y-o-Y/1.3 per cent Q-o-Q and deposit growth 15 per cent Y-o-Y/5.1 per cent Q-o-Q.

This, the brokerage said, reflected the underlying changes that the bank is undertaking to improve the LDR. The LDR has likely improved Q-o-Q to around 100 per cent (from 103 per cent in Q1 FY25).

Given this, Kotak Institutional Equities expects NII at Rs 30,066.2 crore (up 9.8 per cent Y-o-Y/0.8 per cent Q-o-Q); non-interest income at Rs 11,449.1 crore (up 6.9 per cent Y-o-Y/7.3 per cent Q-o-Q); PPOP at Rs 24,396.1 crore (up 7.5 per cent Y-o-Y/2 per cent Q-o-Q); and net profit at Rs 16,240.5 crore (up 1.7 per cent Y-o-Y/0.4 per cent Q-o-Q).

"We expect the gross NPL ratio to be stable. Near-term focus would be the progress of NIM (expect a positive outlook for the medium term) and look to understand the impact of PSL (FY2025)," the brokerage said.