HDFC Bank Share Q3 Results

HDFC Bank announced its third quarter results for the Dec-21 quarter on Saturday and continued to maintain its above 18% quarterly growth in bottom line. That has become the trend for HDFC Bank with a surprising degree of consistency. However, even as revenues and profits were higher for the Dec-21 quarter, HDFC also faced pressure on the NPA front, albeit still manageable in absolute terms.
 

HDFC Bank Quarterly Results
 

For the Dec-21 quarter, HFDC Bank reported 8.9% growth in top line revenues at Rs.43,365 crore on a YoY basis. Unlike the pressure across specific verticals in the previous quarters, HDFC Bank saw all round growth across treasury, corporate banking and retail banking. Operating profits across these three verticals also grew YoY. Net interest income (NII) was up 13% at Rs.18,444 crore while net interest margin (NIM) was stable at 4.1% in Q3.

The operating profits of HDFC bank grew 11.76% at Rs.18,034 crore in Q3, largely because while the interest and investment income showed growth, the interest cost was flat to marginally higher. This ensured that the growth in NII was maintained and the NIMs were stable at 4.1% range. 

The operating performance was also helped by the C/I ratio and the credit costs in the quarter. For instance, the cost to income (C/I) ratio for the quarter was at a competitive level of 37.1%. As an outcome of falling interest rates, the credit costs are lower at 0.94% compared to 1.25% in the corresponding Dec-20 quarter. Operating profit margin (OPM) expanded from 40.50% in the Dec-20 quarter to 41.59% in the Dec-21 quarter.

Net profits for the Dec-21 quarter were up by a healthy 20.78% on consolidated basis at Rs.10,591 crore. This was largely helped by a slew of factors which include the better interest spreads, higher other income and lower provisioning for doubtful debts. For the Dec-21 quarter, the provisions for doubtful assets made by HDFC bank actually fell by 12% to Rs.3,816cr. This clearly shows reduced stress. PAT margins improved 60 bps to 19.5%.

Gross NPAs did see a spike in the Dec-21 quarter from 0.81% to 1.26% on a YoY basis. However, on a sequential basis, the gross NPAs were lower by 9 bps. The overall NPAs were higher due to the COVID reliefs being withdrawn by the RBI. However, gross NPA levels are still very competitive. At the NPA level, it was higher by 28 bps YoY at 0.37%, but the low number shows that potential losses are substantially provided for.