HDFC Bank Q3FY22 Preview: NII seen at Rs186.4 billion, PAT at Rs103.3 billion

Result date: 15th January 2022
Recommendation: Buy
Target price: Rs2,000

India’s largest private sector HDFC Bank is all set to start off the results season for banks. It is likely to post a good performance on all three key parameters – growth, margins and asset quality.

Its loan book has grown 16.4% YoY and 5% QoQ, amid strong traction in commercial, rural and retail loans. Deposits grew 13.8% YoY and 2.8% QoQ. Growth in CASA deposits remained strong at 24.6% YoY and 3.5% QoQ with retail leading from the front. Share of CASA in total deposits improved to 47.1% from 43% in the year-ago quarter and 46.8% in the September 2021 quarter.

Both Net Interest Income (NII) and Non-Interest Income are likely to clock in double digit growth on a YoY basis. Higher CASA ratio and enhanced loan-to-deposit ratio will rub off favorably on the bank’s margins during the quarter. Asset quality metrics are likely to improve on the back of lower slippage.

Important management insights to watch out for:

• Unsecured retail segment

• NPA, margins and recovery









Rs. Billion

December 2021 estimates

YoY change

QoQ change

Net Interest Income

186.4

14%

5%

Non-Interest Income

82.5

11%

11%

Total Income

268.9

13%

7%

Pre provisioning Op. Profit

171.2

13%

8%

Profit Before Tax

139.2

18%

17%

Profit After Tax

103.3

18%

17%

Source: IIFL Research

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( With inputs from indiainfoline)