Q4 earnings: Despite a moderated YoY growth in loan book, HDFC Bank continues to outperform industry, resulting in market share gain
HDFC Bank Q4 preview: Just when India Inc was getting back on its feet, coming out from the Covid-19 pandemic-led disruption, the second wave of infections is making analysts wary of the recovery. Hence, when HDFC Bank reports its March quarter results (Q4FY21) on Saturday, April 17, all eyes would be on the management’s growth outlook.
Analysts at Kotak Institutional Equities would focus on near-term growth recovery and segments that would be driving this growth. They are factoring in a 6 percent quarter-on-quarter (QoQ) decline in net profit, at Rs 8,218.6 crore, on the back of a 0.3 percent dip in operating profit at Rs 15,135.7 crore. Both the parameters, however, would be 18.6 percent and 16.8 percent higher, respectively on a year-on-year (YoY) due to the low base effect.
In Q3FY21, HDFC Bank had reported a net profit of Rs 8,758.3 crore (Rs 6,927.7 crore in Q4FY20) and an operating profit of Rs 15,186 crore (Rs 12,958.8 crore in Q4FY20).
On the upside, those at Motilal Oswal Financial Services peg the lender’s PAT at Rs 8,690 crore, up 25.4 percent YoY, but down 0.7 percent QoQ. The operating profit, meanwhile, is pegged at Rs 15,560, up 20 percent YoY.
Loan book and interest income
In a Q4 business update, the private lender announced that its advances aggregated to approximately Rs 11,320 billion as of March 31, 2021, a growth of around 13.9 percent over Rs 9,937 billion as of March 31, 2020, and a growth of around 4.6 percent over Rs 10,823 billion as of December 31, 2020.
The bank’s deposits grew 16.3 percent at approximately Rs 13,350 billion as of March 31, 2021, as compared to Rs 11,475 billion year-on-year (YoY) and a growth of around 5 percent quarter-on-quarter (QoQ).
Despite a moderated YoY growth, HDFC Bank continues to outperform the industry, resulting in market share gain, note analysts at ICICI Securities.
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