Q3FY23 Preview: HDFC Bank: NII seen at Rs223.1 billion, PAT at Rs121.4 billion

13 Jan 2023 , 10:00 AM

Result date: 14^th January, 2023

Recommendation: Buy

Target price: Rs1,950

 

HDFC Bank posted weaker than expected loan growth of 1.8% over the September 2022 quarter, due to the drag from Corporate loans. As compared to the year-ago quarter, loan growth decreased to 19.4%. Deposits grew 3.6% sequentially and 20% over the year-ago quarter. The Bank’s CASA ratio decreased ~140 basis points sequentially to 44.0%.

Analysts at IIFL Capital Services expect HDFC Bank’s Net Interest Margin (NIM) to improve sequentially. However, lower LDR and lower CASA could limit the improvement. Asset quality is expected to remain benign.

Important management insights to watch out for:

• Status of merger with HDFC/regulatory dispensations 
• Outlook on credit growth across all segments
• Margin drivers

 

Rs Billion	December 2022 estimates	YoY change	QoQ change
Net Interest Income (NII)	223.1	21%	6%
Total Income	309.9	16%	8%
PPOP	191.0	14%	10%
Provisions	28.5	(5)%	(12)%
Profit After Tax	121.4	17%	14%

Source: IIFL Research