HDFC Bank share falls 1% post Q1 results

Shares of HDFC Bank dropped over 1% in opening trade on Monday, in an otherwise positive broader market, even after it reported double-digit growth in its bottomline for the quarter ended June 2022. In contrast, the BSE benchmark Sensex climbed 390 points to 54,150 in a broad-based rally, with 27 of 30 stocks, barring HDFC twins and M&M, rising on the index.

On Monday, HDFC Bank shares opened marginally lower at ₹1,352, against Friday’s closing price of ₹1,363.85 on the BSE. Post opening, the banking stock fell as much as 1.2% to hit a low of ₹1,346.60, driven by a surge in volume trade. As many as 7.5 lakh shares worth ₹101.75 crore changed hands over the counter in the first half an hour of the day’s trade, compared with a two-week average volume of 2.74 lakh stocks. The share has been highly volatile today with an intraday volatility of 14.59% (calculated from the weighted average price). The share price of banking heavyweight has fallen 8% in the past one year and 11% in the calendar year 2022. It touched a 52-week high of ₹1,724.30 on October 18, 2021, and a 52-week low of ₹1,271.75 on June 17, 2022.

HDFC Bank, the country’s largest private lender has posted 19% year-on-year (YoY) increase in its net profit at ₹9,196 crore in the April-June quarter of the current financial year (Q1FY23), compared to ₹7,729.64 crore in the same period last year, driven by a decline in provisions and improvement in asset quality. However, on a quarter-on-quarter basis, the profit dropped from ₹10,055.18 crore in the March quarter (Q4 FY22). On a consolidated basis, the profit jumped 20.9% to ₹9,579 crore during the quarter under review.

The private bank’s net interest income, the difference between the interest earned and the interest expended, jumped 14.5% YoY to ₹19,481.4 crore, supported by a 22.5% growth in advances and 19.2% rise in deposits. The total balance sheet surged 20.3% during the April-June quarter of 2022.

The non-interest income also increased to ₹9,011.6 crore, from ₹6,288.6 crore in the corresponding period last year, while its pre-provision operating profit (PPOP) grew by 14.7% YoY to ₹15,367.8 crore for the quarter ended June 2022.

HDFC Bank’s total loans rose 21.6% on yearly basis to ₹13.95 lakh crore as on June 30, 2022, driven by double-digit credit growth in retail, commercial and corporate loans.

On the asset quality front, the bank’s gross non-performing asset ratio stood at 1.28%, as compared to 1.47% a year ago and 1.17% in the March quarter. The net NPAs stood at 0.35% versus 0.48% in the same period last year.

At the end of the June quarter, HDFC Bank had floating provision provisions worth ₹1,451 crore and contingent provisions worth ₹9,630 crore. The total provisions account for 170% of gross non-performing loans.