HDFC Bank Q1 preview: Profit may grow 18-22% YoY; NIM, asset quality likely to remain stable

is likely to report an 18-22 per cent year-on-year (YoY) jump in net profit for the June 2022 quarter on a 15-16 per cent YoY rise in net interest income (NII). Net interest margin (NIM) is expected to be flattish sequentially. Asset quality may remain stable, said analysts.

Emkay Global said it sees HDFC Bank’s profit climbing 18.2 per cent YoY to Rs 9,135.50 crore from Rs 7,729.60 crore. NII is seen jumping 16.3 per cent YoY to Rs 19,785.60 crore from Rs 18,872.70 crore. NIM is expected to stay flat at 4.2 per cent quarter-on-quarter (QoQ).

“The bank may report healthy profitability led by better growth and contained credit cost, but margin may remain soft. Slippages are likely to remain flattish sequentially. The bank may reverse part of the Covid provisions with stress receding,” Emkay Global said.

Sharekhan is pegging HDFC Bank’s profit at Rs 9,398 crore, up 21.6 per cent YoY. It sees NII at Rs 19,616 crore, up 15.3 per cent YoY. Pre-provision profit is seen rising 5.6 per cent YoY to Rs 15,985 crore. Asset quality would improve, led by lower slippages and better recovery, Sharekhan said, adding that growth in the unsecured portfolio, fee income and opex growth would be key monitorables for the quarter.

sees profit growing 20 per cent to Rs 9,275 crore and NII rising 16.1 per cent YoY to Rs 19,739 crore.
Bank’s business update was not enthusing but its lower-than-sector loan growth is now priced in, said Securities. NIM would likely improve sequentially owing to its higher retail share, the brokerage said.

“The bank de-risked its bond book by selling AFS and booking corporate loans in Q4FY22. As such, MTM would be manageable in Q1FY23,” Edelweiss added.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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