Q4 Preview | HDFC Bank likely to record 22% rise in profit on higher net interest income

HDFC BANK

HDFC Bank, India's largest lender by market value, is all set to report its corporate earnings for the January-March 2023 period on April 15. The average of a poll of three brokerages estimates that the profits will rise to Rs 12,181 crore.

Net interest income (NII) is expected to increase 30.5 percent on-year (up 8.8 percent QoQ) to Rs 24,601.9 crore, whereas the average poll of estimates sees HDFC Bank to report 21.9 percent YoY rise in March quarter profits.

The financial results of the banking behemoth come at a time when the RBI has paused key interest rates for now but hinted at possible increases going forward in its battle to further weaken inflation without damaging economic growth. Whereas the Federal Reserve still combats the persistently high US inflation challenge with one more rate hike anticipated in the next FOMC meeting. It is due to the same only that fears of a global recession are rising.

As per brokerage firm Prabhudas Lilladher HDFC Bank Q4 net profit is seen up 21.8 percent YoY to Rs 12,245.4 crore. Net interest income (NII) is expected to increase 32.5 percent YoY (up 8.8 percent QoQ) to Rs 24,999.9 crore.

Elara Securities Expects HDFC Bank to report 24.4 percent YoY rise in profit at Rs 12,507 crore for the March quarter compared with Rs 10,055 crore in the same quarter last year. Net interest income is seen rising 28.2 percent to Rs 24,204 crore from Rs 18,872 crore YoY.

"As reported in provisional updates, business momentum has turned out strong with loan growth of 16.9 percent YoY and 6.2 percent QoQ. Deposit growth of 20.8 percent YoY and 8.7 percent QoQ was higher than our estimates. We are yet to align reported numbers to show outperformance," Elara Securities said.

Emkay Global expects NIM for the quarter to come in at 4.3 percent, up 5 basis points QoQ. It expects HDFC Bank to report healthy profitability, "led by healthy NII growth/contained provisions. Slippages are expected to come off on a QoQ basis due to lower stress from the agri portfolio", it said while expecting profit for the quarter to come in at Rs 12,037 crore, up 19.7 percent YoY.

HDFC Bank Q4 most recent business update

It is to be noted that in a recent business update, HDFC Bank said its loans stood at Rs 16,00,500 crore at the end of March 31, 2023, marking a quarter-on-quarter growth of 6.2 percent. Its advances or loans expanded 6.5 percent sequentially, taking into account gross of transfers through interbank participation certificates and bills, according to a company statement.