HDFC Bank has another stellar quarter as Q3 net up 14.4% at Rs8760cr

HDFC Bank, India’s most valuable bank in terms of market cap, reported 3.95% growth yoy in revenues in the Dec-20 quarter at Rs39,839cr.

Jan 16, 2021 05:01 IST India Infoline News Service

HDFC Bank, India’s most valuable bank in terms of market cap, reported 3.95% growth yoy in revenues in the Dec-20 quarter at Rs39,839cr. Even as wholesale banking revenues dwindled on yoy basis, growth was visible in revenues from retail banking and treasury.


For the Dec-20 quarter, the operating profits were up 17.55% at Rs16,136cr. This growth was largely on the back of the interest outgo which fell by nearly 10% yoy due to sharply lower cost of funds. As a result, the operating margin or OPM crossed the psychological 40% mark in Dec-20; a growth of nearly 470 basis points in operating margins on a yoy basis.


Profit after tax (PAT) for the Dec-20 quarter came in much better than street expectations. It was up 14.36% at Rs8,760cr. Provisions were higher on yoy basis but lower on sequential basis. PAT margins expanded by 200 basis points to 21.99% in Dec-20 quarter.


Financial highlights for Dec-20 compared yoy and sequentially
HDFC Bank
Rs in Crore Dec-20 Dec-19 YOY Sep-20 QOQ
Total Income (Rs cr) ₹ 39,839 ₹ 38,326 3.95% ₹ 38,438 3.64%
Operating Profit (Rs cr) ₹ 16,136 ₹ 13,727 17.55% ₹ 14,798 9.04%
Net Profit (Rs cr) ₹ 8,760 ₹ 7,660 14.36% ₹ 7,703 13.73%
Diluted EPS (Rs.) ₹ 15.80 ₹ 13.90 ₹ 14.00
Operating Margins 40.50% 35.82% 38.50%
Net Margins 21.99% 19.99% 20.04%
Gross NPA Ratio 0.81% 1.42% 1.08%
Net NPA Ratio 0.09% 0.48% 0.17%
Return on Assets 0.55% 0.55% 0.48%
Capital Adequacy 18.90% 18.50% 19.10%
 


Key takeaways from the Dec-20 quarter results
  • HDFC Bank has scored really well on most asset quality parameters. For example, the gross NPAs fell sharply from 1.42% in Dec-19 to 0.81% in Dec-20 quarter. Similarly, the net NPAs at just 0.09% hint at most of the medium terms risks in asset quality almost entirely provided for. Capital adequacy has also remained comfortable.
  • Net interest income or NII for the Dec-20 quarter was up 15.1% on a yoy basis. While the growth in advances stood at 15.6% for the Dec-20 quarter, the core net interest margin or NIM has got a prop to 4.2% in the Dec-20 quarter on lower cost of funds.
  • The provisions for losses and contingencies in the Dec-20 quarter at Rs3,414cr included a specific loan loss provision of Rs691cr. Total deposits grew by 19.1% in the Dec-20 quarter with CASA deposits growing 29.6%. The share of CASA in the overall deposit mix now stands at 43%.

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