HDFC Bank, India's largest private lender, on Saturday posted a net profit of Rs 19,610 crore for the second quarter of FY27, missing analysts' expectations. Profit rose 5.2% year-on-year in the quarter ended 30 September.
According to the NDTV Profit report, higher provisions and softer-than-expected net interest income weighed on HDFC Bank's performance, even though the lender posted robust growth in loans and deposits. The report added that key operating metrics came in below analysts' expectations.
MARGIN AND PROVISIONS WEIGH ON EARNINGS
Net interest income (NII), the difference between interest earned and interest paid, increased 9.7% from a year earlier to Rs 34,619 crore. That was below the analysts' estimate of Rs 34,991.51 crore. Net interest margin (NIM), measured against total assets, stood at 3.16%.
Provisions climbed 2.1% year-on-year to Rs 3,574 crore, from Rs 3,501 crore in the corresponding quarter of the previous year.
ASSET QUALITY IMPROVES ON A YEAR AGO
The gross non-performing asset (NPA) ratio declined to 1.11% as of 30 September from 1.24% a year earlier. The net NPA ratio improved to 0.37% from 0.42%.
LOAN AND DEPOSIT GROWTH REMAINS STRONG
Average advances under management grew 14.1% year-on-year to Rs 31.87 lakh crore. Gross advances at the end of September rose 16.3% to Rs 32.20 lakh crore.
Within lending, retail loans increased 11.7% from a year ago, while lending to small and mid-market enterprises grew 23.5%.
On the liabilities side, average deposits rose 16.8% year-on-year to Rs 31.66 lakh crore. Average current account and savings account (CASA) deposits increased 10.7% to Rs 9.71 lakh crore.
SHARES HAVE LAGGED OVER THE PAST YEAR
Shares of HDFC Bank ended on a flat note at Rs 728.10 on the BSE on Friday. Over the last one-year horizon the stock has declined about 10%, and it is down 12% year-to-date.
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