Q2FY24 Preview: HDFC Bank: NII seen at Rs. 336,590 million, PAT at Rs. 149,343 million

17 Oct 2023 , 11:08 AM

Result date: October 16, 2023

Recommendation: Buy

Target price: Rs. 1,960

(Source: IIFL Research)

HDFC Bank is likely to report solid set of numbers for the September 2023 quarter. Strong loan growth could drive the bank’s Net Interest Income (NII) by 35.4% over the year-ago quarter. 

This will be the first quarterly earnings post completion of the merger of HDFC with HDFC Bank. This means there could be some pressure on net interest margins (NIM) due to the merger. The Reserve Bank of India’s decision to implement incremental cash reserve ratio could be another key pressure point on the bank’s NIMs, believe analysts.

The merger will also weigh on the bank’s asset quality and non-performing assets are likely to move north.

Important management insights to watch out for:

• Outlook on business growth
• Update on earnings trajectory after the merger with HDFC
• Update on post-merger return ratios

Rs. Million	September 2023 estimates	YoY change	QoQ change
NII	336,590	35.4%	19.3%
PPOP	235,949	32.0%	25.7%
Profit After Tax (Rs. mn)	149,343	40.9%	24.9%

Source: Brokerage Reports