HDFC Bank likely to post impressive Q3 net profit

IIFL expects the bank’s net profit to surge 20% to Rs. 3,353.50 crore yoy and 16.9% qoq.

HDFC Bank Ltd, one of India’s leading private sector lenders, will announce its financial results on January 25 for the third quarter ended December 31, 2015.

IIFL expects the bank’s net profit to surge 20% to Rs. 3,353.50 crore yoy and 16.9% qoq.

IIFL forecasts the company’s net revenue for Q3 FY16 to increase to Rs. 7,058 crore, growing at 23.8% yoy and 5.6% qoq.

EBIDTA margin will be at 4.2%, with a yoy fall of 25 bps.

According to IFL, “In H2 CY15, most large private and public banks have reduced their base rate by 40 to 60bps in response to the continued easing by RBI. While banks have also announced material (but not commensurate) deposit rate cuts during the aforesaid period, NIM has likely been exposed to drops in the near term, especially for those banks which have a large portion of corporate book. Among the large corporate lenders, PSU banks are more vulnerable given the negligible share of wholesale funding in their liability franchise and weak CASA accretion playing itself out. So, while most PSU banks should see their margins declining 10 to 15 bps qoq, private banks with significant corporate book (ICICI, Axis and Yes) could see a NIM decline of ~10 bps and the retail oriented peers (HDFC Bank, IndusInd, Kotak) may see a small contraction ranging from 0 to 10 bps.”

Other key Q3 results on January 25 include Asian Granito, Asahi Songwon, Eveready Industries, and Hester Bio.