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- 02 Feb 2023
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MODEST PERFORMANCE; NIMS IMPROVE 10 BPS - HDFC LTD LATEST QUARTERLY RESULT
HDFC Ltd – Q3FY23 First Cut
(CMP – Rs 2607, MCap - Rs 476383 crore)
Q3FY23 Earnings Summary
HDFC Ltd posted modest business growth and operational performance
Net interest income grew 15.7% YoY and 4.3% QoQ as margins expanded 10 bps QoQ at 3.5% led by transmission of interest rate. Despite higher dividend income, other income declined 3.3% YoY and 61.2% QoQ to Rs 713 crore. Opex growth came in higher at 19.4% YoY. This is attributable to up fronting of staffing expenses. Hence, C/I ratio up at 10.3% vs 9.7% in Q3FY22 and 9.1% in Q2FY23. Provisions declined 21.8% QoQ and 5.9% YoY to Rs 370 crore, resulting in further decline in credit cost at 0.22%. Net profit for the quarter was up 13.2% YoY and de grew 17.1% QoQ to Rs 3691 crore (which is largely in line with estimates)
Asset quality was largely steady as GNPA ratio stood at 1.49% vs 1.44% QoQ led by healthy collection efficiency, which was at 99% for individual segment. GNPA in the individual segment was at 0.86% vs 0.91% in Q2FY23 while in non-individual segment GNPA came in at 3.89% vs 3.99% in Q2FY23. HDFC Ltd carried a total provision of Rs 13,274 crore. The provisions carried as a percentage of the exposure at default (EAD) was steady at 2.21%
Credit growth was a bit slower at 11.8% YoY to ~Rs 6.02 lakh crore. Growth in the individual segment was healthy at 18% YoY (AUM basis); forming 82% of total gross AUM, led by growth across segments. The growth in individual loan book, after adding back loans sold in the preceding 12 months was 26%
View: Management outlook continues to remain encouraging. Continued strong demand across segments and geographies augurs well for business growth.
Impact: Neutral