Motilal Oswal has come out with its October-December earnings estimates for the banking sector. The brokerage house expects HDFC Bank to report a 17.2 percent growth quarter-on-quarter (up 25 percent Y-o-Y) in net profit at Rs 2323.5 crore.
Net interest income of HDFC Bank are expected to increase by 4.7 percent Q-o-Q (up 17.8 percent Y-o-Y) to Rs 4689.2 crore, according to Motilal Oswal.
Motilal Oswal on HDFC Bank:
On the back of healthy retail business, HDFCB is expected to deliver loan growth of 18 percent+ Y-o-Y. Deposit growth is expected to be in line with loan growth at 17 percent Y-o-Y.
NIM is expected to be stable Q-o-Q and Y-o-Y at 4.3 percent. Thus, NII is expected to grow 5 percent Q-o-Q and 18 percent Y-o-Y.
Fee income growth is expected to be lower than the balance sheet growth and be at 12 percent Y-o-Y. Contribution from trading income isexpected to be negligible.
Asset quality is expected to remain healthy, though stress in few segments of retail loans has increased, which needs to be watched. We build provisions of INR 3.2 billion v/s INR 3.9 billion in 2QFY14.
Earnings growth is expected to be healthy at 25+ Y-o-Y.
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