HDFC reports steady operating performance
News: HDFC Ltd posted a steady operational performance as NII (calc.) was up 5.2% YoY to Rs.4146 crore wherein NIMs were stable at 3.6%. Margins witnessed pressure mainly due to higher LCR, strong growth in retail home loans and NPA recognition. The corporation has made provisions worth Rs.393 crore during the quarter and cumulative provisions for Covid-19 was at Rs.1187 crore vs. Rs.1304 crore QoQ, indicating some utilisation/release of the same. Net profit, thus, came in at Rs.3261 crore, up 11.4% YoY. GNPA increased from 2.0% to 2.32% on a sequential basis wherein GNPA in individual segment was up to 1.44% from 1.1% QoQ while NPA in non-individual book jumped to 5.04% vs. 4.69% QoQ. Credit growth gathered further momentum as it was up by 11.4% YoY to Rs.5.2 lakh crore.
Views: We believe that continued pick-up in business momentum and better outlook on growth is a positive. Recent performance was steady and slight blip on asset quality due to shift to new norms is not concerning.