HDFC Bank, which will announce its fourth-quarter earnings on April 20, is likely to report more than 20 percent growth in net profit, net interest income and in pre-provision operating profit on the back of robust loan growth in the quarter.
Reliance Securities expects 26 percent year-on-year growth in Q4 profit on healthy operating performance and low credit costs. While Motilal Oswal sees the same at 21 percent and ICICI Securities expects net at 23 percent.
According to brokerages, net interest income growth for the quarter is expected to be in the range of 21-26 percent compared to the same period last fiscal.
Pre-provision operating profit may register a growth of around 21-28 percent growth YoY.
Loan book growth is expected to remain healthy even as some moderation is expected in the auto portfolio, brokerages said, credit cost and asset quality should see improvement as agri stress is expected to be lower.
"Loan growth is expected to remain healthy at around 23 percent YoY, driven by retail loans, while deposit growth is estimated at around 21 percent YoY, led by an increase in term deposits," Motilal Oswal said.
Asset quality is expected to remain stable with GNPA at around 1.4 percent, it added.
ICICI Securities expects advances growth to remain healthy at 24.5 percent YoY led by a balanced mix of corporate as well retail. "Growth in unsecured retail advances (credit cards and personal loans) may remain robust."
NBFC crisis has led the bank to gain its market share and also got the pricing power back, said Narnolia which expects slippages to remain elevated.
Overall, brokerages feel asset quality is expected to remain stable with GNPA in the range of 1.3-1.5 percent.
Key issues to watch out for
- outlook on stress in SME and retail book
- trends in digital banking/payments and various initiatives
- NIM performance, and slippages trend in agri portfolio
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