Private lender HDFC Bank is all set to announce its quarterly financial results for the period ending on June 30, 2024 on Saturday, July 20. Following the bank’s completion of one year since its merger with HDFC Ltd on July 1, 2024, analysts anticipate that the combined entity’s loan and deposit growth will stabilize moving forward.
For the first quarter of FY25, analysts expect HDFC Bank to report net profit (profit after tax) either flat or a slight decline on a quarter-on-quarter (QoQ) basis.
Operationally, HDFC Bank’s net interest income (NII) is expected to remain stable quarter-over-quarter due to subdued growth in loans and deposits. Additionally, the bank’s net interest margin (NIM) may experience a slight contraction in Q1FY25.
PAT and NII
Net profit for the June quarter is expected to decrease by approximately 5% year-on-year, according to analysts. However, net interest income (NII) for the same period is projected to increase slightly by 2% quarter-on-quarter.
Analysts at ICICI Securities anticipate HDFC Bank to report a year-on-year deposit growth of approximately 2.5%, but expect even slower loan growth on a quarter-on-quarter basis. They project advances to reach ₹25.22 trillion, reflecting a 56% year-on-year increase but a 2% quarter-on-quarter decline. Despite this, credit rationing and a sharper focus could help improve net interest margins (NIMs) quarter-on-quarter. The report also suggests that slippages are likely to increase quarter-on-quarter due to seasonal factors.
Operating expenses and NPL ratio
Operating expenses are expected to stay under control, with margins and asset quality anticipated to remain broadly stable. Key areas to monitor will include guidance on business growth and earnings trajectory, according to brokerage firm Motilal Oswal.
Analysts at Kotaka Instititional Equities said, “We expect the gross NPL ratio to be stable. Near-term focus would be the progress of NIM (expect a positive outlook for the medium term) and look to understand the impact of PSL (FY2025).”