HDFC BANK Q3 RESULTS 2024: NET PROFIT BEATS ESTIMATES

HDFC Bank reported its December quarter numbers on Tuesday after market hours. The results are above market expectations. Let us look at HDFC Bank's Q3FY24 quarterly numbers in detail.

About HDFC Bank

The company needs no introduction. HDFC Bank and HDFC Limited merger is completed, which makes it one of the biggest banks in the world. HDFC Bank is one of the largest private sector banks in India. It was established in 1994. HDFC Bank provides a wide range of banking and financial services to individuals, businesses, and corporates.

Crucial Parameters

• PE Ratio: 23.3
• 52-week high: Rs 1,757.80
• Market Cap: 12,74,740.22 crore
• ROE: 17.2%

Share Price Movement

Earlier in the day, HDFC Bank's share price closed at Rs 1,679.15 on NSE, up 0.38%. The share price has been going through a time correction - it means the price has not moved much despite the bank reporting growth in the topline and bottomline. 

In the last six months, HDFC Bank has given only 2.11%, and in one one-year, only 5.92%. In the 5-year time frame, it has delivered 57% returns, which is much lower than the 5-year historical returns and benchmark Nifty50.

How has HDFC Bank performed in Q3FY24?

Below are key numbers related to HDFC Bank's results for the December 2023 quarter:

Revenue: HDFC Bank reported net revenue of Rs 71,770 crore for Q3FY24, a growth of 113.5%. In the year-ago period, the bank reported a net revenue of Rs 33,620 crore. In the previous quarter, the net revenue reported was Rs 66,317 crore, an excellent growth of 8.22%.

Net Interest Income (NII): It measures the difference between the interest income generated from loans, investments, and other interest-earning assets and the interest expenses incurred on deposits, borrowings, and other interest-bearing liabilities. It reflects the bank's ability to effectively manage its interest rate risk and generate profits from its interest-related operations. 

The NII for HDFC Bank for the December quarter was Rs 28,470 crore, a jump of 23.9%. In the year-ago period, the net interest income was Rs 22,990 crore. In the September quarter, the NII was Rs 27,385 crore. The core net interest margin was at 3.4% on total assets and 3.6% based on interest-earning assets.

Profits: The consolidated profit reported by the bank was Rs 17,260 crore for Q3FY24, a jump of 35.9% from the year-ago period. Earning Per Share (EPS) for the December quarter was Rs 22.7 (up from Rs 22.2 in the September quarter), and book value per share was Rs 576 (from Rs 552.5 in the previous quarter).

Other income: It includes the non-interest income, and it was Rs 11,140 crore. In the year-ago period, it was Rs 8,500 crore. Other income has four components - Fees and commissions stood at Rs 6,940 crore. Foreign exchange and derivative revenue were reported at Rs 1210 crore, net trading and mark-to-market gains of Rs 1,470 crore, and miscellaneous income of Rs 1,520 crore.

Deposits: HDFC bank reported a total deposit of Rs 22.14 lakh crore, a growth of 27.7% year on year. CASA deposits increased by 9.5%, with savings account deposits at Rs 5.80 lakh crore and current account deposits at Rs 2.56 lakh crore. 

The Time deposits saw exceptional growth numbers. It grew to Rs 13.78 lakh crore with a 42.1% increase. The overall CASA deposits comprised 37.7% of total deposits at the end of the December quarter.

Gross Advances increased by 62.4% at Rs 24.69 lakh crore. Domestic retail loans grew by 111.1%, commercial and rural bank loans increased by 31.4%, while overseas advances constituted 1.7% of total advances.

Asset Quality: The HDFC Bank reported Gross non-performing assets (NPAs) at 1.26% of gross advances for Q3FY24, as against 1.34% in Q2FY24 and 1.23% in Q3FY23. The Net NPA was at 0.31% of net advances at the end of the December quarter.

How have HDFC Bank subsidiaries performed in Q3FY24?

HDFC Securities Limited (HSL): It is amongst the leading retail broking firms in India. At the end of the December quarter, the bank held a 94.7% stake in HSL. For the quarter ended December, HSL's total revenue was at Rs 700 crore, as against Rs 500 crore in the year-ago period. Profit after tax for the quarter was Rs 230 crore, as against Rs 200 crore for the quarter ended December 31, 2022.

HDB Financial Services Limited (HDBFSL): It is a non-deposit-taking non-banking finance company (NBFC) offering a wide range of loans and asset finance products to different customer segments. As of December 31, 2023, the Bank held a 94.7% stake in HDBFSL. For Q3FY24, HDBFSL's net revenue was at Rs 2,350 crore as against Rs 2,230 crore for the quarter ended December 30, 2022, a growth of 5%. Profit after tax for the quarter ended December 31, 2023, was Rs 640 crore compared to Rs 500 crore for the quarter ended December 31, 2022, a growth of 27.1%.