HDFC Bank Share Price Drops Ahead of Q2 FY24 Results

HDFC Bank Share Price Drops Ahead of Q2 FY24 Results
HDFC Bank Share Price Drops Ahead of Q2 FY24 Results
HDFC Bank Share Price Drops Ahead of Q2 FY24 Results
HDFC Bank Share Price Drops Ahead of Q2 FY24 Results

HDFC Bank Share Price Drops Ahead of Q2 FY24 Results

HDFC Bank Share Price Drops Ahead of Q2 FY24 Results

HDFC Bank Share Price Drops Ahead of Q2 FY24 Results

The share price of HDFC Bank, India’s largest private sector lender, faced a decline on Monday as investors awaited the announcement of its September quarter results for fiscal year 2023-24 (Q2 FY24). Here are some key details:

  • HDFC Bank shares opened at ₹1,536.70 on the BSE, slightly lower than the previous close of ₹1,536.75.
  • The stock experienced selling pressure and traded around 0.60% lower at ₹1,527.50 per share on the BSE as of 9:50 am.

This marks HDFC Bank’s first quarterly financial result after its merger with Housing Development Finance Corporation (HDFC), which took effect on July 1. The market expects Q2 FY24 to witness an increase in net profit and net interest income (NII). However, the bank is likely to face margin contraction due to the merger.

Analysts anticipate that excess liquidity could impact HDFC Bank’s net interest margin (NIM) in Q2 FY24. Nonetheless, they believe that NIMs are likely to recover in the second half of the fiscal year as credit growth picks up and liquidity is deployed.

HDFC Bank’s quarterly business update revealed a robust 57.7% growth in gross advances, reaching ₹23.54 lakh crore as of September 30, 2023, compared to ₹14.93 lakh crore the previous year. Deposits amounted to approximately ₹21.73 lakh crore in Q2 FY24, reflecting a growth of about 29.9% over ₹16.73 lakh crore as of September 30, 2022.

Motilal Oswal Financial Services expects the bank’s margins to moderate sequentially and anticipates that asset quality for the merged entity will improve, while margins may soften in the short term. They project a YoY growth of 39.4% in net profit to ₹14,780 crore and a 33.6% YoY increase in NII to ₹28,090 crore. The bank’s operating profit is expected to reach ₹22,790 crore, a 31% YoY increase.

Prabhudas Lilladher analysts believe that gross NPAs (Non-Performing Assets) could see a slight improvement of 6 basis points (bps) quarter-on-quarter (QoQ), reducing the NPA ratio to 1.34%. They also anticipate that provisions will remain flat. While core earnings growth is expected to be muted for FY24 (3.5% YoY), core PAT (Profit After Tax) may witness a Compound Annual Growth Rate (CAGR) of 20.7% over FY24-26E as NIM and loan growth normalize.

HDFC Bank’s share price has declined over 5% year-to-date (YTD) and over 6% in the last month.

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