HDFC Q3 preview: Profit likely to jump over 20%, net interest income growth seen at 10%
Key thing to watch out for would be asset quality in the non-retail segment.
May 07, 2021 / 09:08 AM IST
Housing Development Finance Corporation (HDFC) on May 7 is expected to report more than 20 percent year-on-year growth in profit with around 10 percent growth in net interest income for the quarter ended March 2021.
HDFC shares corrected 5 percent so far in 2021, but rallied more than 40 percent in the 12 months.
"We expect HDFC's loan growth to accelerate to 11 percent YoY in Q4 FY21 from 9 percent YoY in Q3 FY21 on the back of an increase in individual business loan growth to 12 percent YoY from 10 percent YoY," said Kotak Institutional Equities which sees 23 percent YoY growth in profit and 9 percent in net interest income.
"Core net interest margin will likely moderate to 2.8 percent from 3 percent in Q3 FY21 reflecting falling home loan yields; increase in the marginal cost of funds in the shorter end is unlikely to reflect in the immediate term," the brokerage added.
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According to Motilal Oswal, profit could grow 27.5 percent YoY and net interest income 9.8 percent YoY in the March 2021 quarter. The sharp decline in provisions could be supportive of the bottomline.
Key thing to watch out for would be asset quality in the non-retail segment. "We pencil in QoQ flat credit costs at 43 bps even as gross non-performing loans might inch up, reflecting the complete impact of the end of the moratorium," said Kotak.