Money & Banking

Brokerages expect HDFC Bank to report PAT growth of 20 per cent

Our Bureau Chennai | Updated on October 20, 2019 Published on October 19, 2019

Over 10 years, HDFC Bank has given a return of 621.62 per cent against the Sensex's 126.82 per cent.

 HDFC Bank,one of the consistent performers will declare its quarterly results  later in the day.

The stock has been outperforming the index on almost every scale. It has provided a return-to-date return of 15.8 per cent as against the BSE Sensex's 8.96 per cent. Over the three-year period, it has produced 95.51 per cent vs Sensex's 40.1 per cent; over 10 years, HDFC Bank has given a return of 621.62 per cent against the benchmark's 126.82 per cent.

As the Bank's financial as well as stock market performance remains robust, one can expect the coming quarter to be a healthy one, if one goes by brokerages expectations.

Read more: Focus on HDFC Bank, LIC HF results today

Motilal Oswal Financial Services expects profit before tax to grow 20.5 per cent Y-o-Y to Rs 9,230 crore vs Rs 8,530 crore and PAT to grow 19.5 per cent to Rs 5,981 crore. Asset quality is expected to remain stable, with GNPA at about 1.4 per cent added.

As the management indicated some stress in SME and unsecured book, the outlook on the same will be a key monitorable; Trends in digital banking/payments and various initiatives; and development on succession plan, are the key issues according to Motilal Oswal Financial Services.

Elara Securities expect HDFC Bank to report 16.1 per cent growth y-o-y on topline at Rs 1,832.41 crore and 21 per cent growth in net profit of Rs 6,054.6 crore.

HDFC Bank disclosed (y-o-y) credit and deposit expansion at 19 per cent and 22 per cent respectively. "We believe this was largely attributed to its efforts toward credit penetration in rural areas through digitisation and market share gains from public sector banks, which are undergoing consolidation, Elara added.

Reliance Securities says, Moderation in loan book growth likely and margins expected to remain stable sequentially. It also said operating efficiencies and tax cuts to boost earnings.

The broking firm expects NII growth of 15.3 per cent at Rs 13,565 crore (Rs 11,763.40 crore); PAT to grow 22. 8 per cent at Rs 6,146 crore (Rs 5,005.70 crore).

However, Kotak Institutional Equities expects loan growth to slow down to nearly 16% y-o-y resulting in slower NII growth at nearly 19 per cent y-o-y. The retail loan growth slowdown is on account of weak volume growth in auto and a more cautious approach towards unsecured loans. Fee income growth from MFs will be slower y-o-y due to changes in regulations even as asset and payment fees will grow at a slower rate".

The broking house expects HDFC Bank to report an adjusted profit of Rs 6,373.90 crore (Rs 5,005.70 crore) and NII of Rs 14,0388 crore (Rs 11,763.40 crore)

Published on October 19, 2019
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