HDFC Bank Q1 results today. Earnings preview, share price target & more

HDFC Bank, which has the highest weightage in Nifty post its merger with HDFC, is expected to report 19-25 per cent jump in net profit for the June quarter on a 20 per cent-plus surge in net interest income (NII). Net interest margin is seen flattish both sequentially and on year-on-year (YoY) basis.

Analysts noted that HDFC Bank is the only bank whose deposit growth outpaced credit growth consecutively for the last four quarters. They said any commentary on the integration progress of merger with HDFC will be keenly watched.

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For the quarter,  HDFC Bank has already reported Rs 16,15,500 crore in advances in the June quarter, up 15.8 per cent over Rs 13,95,100 crore in the same quarter last year. This translated to a 0.9 per cent sequential growth in advances over Rs 16,00,600 crore in the March quarter. In a business update in the first week of July, HDFC Bank said its deposits aggregated to Rs 19,13,000 crore as on June 30, up 19.2 per cent over Rs 16,04,800 crore as on June 30, 2022. Deposits were up 1.6 per cent over Rs 18,83,400crore as on March 31, 2023.

ICICI Securities expects HDFC Bank to log 19.6 per cent YoY rise in net profit at Rs 10,995 crore compared with Rs 9,196 crore YoY. It sees NII climbing 24.6 per cent YoY to Rs 24,266 crore from Rs 19,481 crore YoY. NIM is seen at 4.07 per cent against 4.10 per cent in March and 4 per cent in the year-ago quarter.

Nomura India is seeing profit at Rs 11,220 crore, up 22 per cent on 20 per cent YoY rise in NII at Rs 23,390 crore. Provisions may rise 12 per cent to Rs 3,580 crore against 31.9 per cent YoY. NIM is seen at 4.1 per cent.

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For the June quarter, HDFC Bank's domestic retail loans grew 20 per cent YoY and 4 per cent QoQ, as per the bank's internal business classification. Commercial & rural banking loans grew 29 per cent YoY or 2 per cent sequentially while corporate & other wholesale loans grew 11 per cent YoY but fell 1 per cent QoQ, HDFC Bank said in a business update.

Sharekhan is expecting profit at Rs 11,642 crore, up 26.6 per cent YoY. It sees NII rising 19.4 per cent YoY to 23,263 crore. Pre-provision operating profit is seen at Rs 18,095 crore, up 17.7 per cent YoY.

HDFC Bank shares are up 1.04 per cent year-to-date against a 3.74 per cent rise in the Nifty Bank index. The stock has an average price target of Rs 2,105, as per Trendlyne, which suggests a 22 per cent potential upside over the prevailing price.

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