HDFC Bank to report Q3 numbers today; here's what to expect

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26 Aug, 2025 12:21

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HDFC Bank, the country's largest lender by market capitalisation, is expected to report more than 15 percent year-on-year growth in profit for the quarter ended December 2020. The likely marginal increase in provisions and improved NII growth backed by loan growth may support profitability.

The company will announce its quarterly earnings on January 16.

The net interest income for the quarter is also likely to see more than 15 percent year-on-year growth driven by credit growth and likely stable net interest margin.

The bank, on January 5, already announced the loan growth of 16 percent at Rs 10.82 lakh crore and deposits growth of 19 percent at Rs 12.71 lakh crore for the quarter ended December 2020 YoY.

"We expect NII growth at around 15.3 percent YoY led by solid loan growth of around 16 percent YoY. Operating profit growth to be slower at 11 percent. We expect NIM unchanged at 4.1 percent. We expect a strong commentary on disbursements," said Kotak Institutional Equities which sees 16.9 percent YoY profit growth for the quarter.

The brokerage had expected the strong CASA ratio. And as expected, HDFC Bank last week said the CASA ratio as of December 2020 stood at around 43 percent, compared to 39.5 percent as on December 2019 and 41.6 percent as on September 2020.

The loan loss provisions could see a marginal increase of 2-3 percent year-on-year, but sequentially the same may decline 15-16 percent, according to Kotak and Prabhudas Lilladher.

Asset quality on the sequential basis may be weak for the quarter ended December 2020. Kotak expects gross NPL ratio to rise sharply led by higher slippages from the retail portfolio, while Motilal Oswal sees gross non-performing assets rising by 20 bps QoQ to 1.3 percent and net NPAs by 10 bps to 0.3 percent.

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Key things to watch out for would be the commentary on near-term asset quality trends and quantum of restructuring that is likely to be expected by Q4FY21, and commentary around credit cards and fee income traction.

During the quarter ended December 2020, the bank said it purchased loans aggregating Rs 7,076 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation.