HDFC Bank Q4 result: Here's what analysts expect its net profit will be

In the previous three quarters of FY17, HDFC Bank has posted good growth in both top-line (net interest income) and bottom-line (profit after tax).

Share price of HDFC Bank closed at Rs 1,462.50 per piece on BSE, up Rs 15 or 1.07%. Photo: Youtube

Share price of HDFC Bank closed at Rs 1,462.50 per piece on BSE, up Rs 15 or 1.07% on Thursday a day ahead of its fourth quarter ended March 31, 2017 results.

Read Q4 result here: HDFC Bank beats estimates in Q4; reports net profit of Rs 3,990 crore

In the previous three quarters of FY17, HDFC Bank has posted good growth in both top-line (net interest income) and bottom-line (profit after tax).

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Till Q3FY17, HDFC Bank's standalone net profit stood at Rs 3,865.33 crore rising 15.15% compared to net profit of Rs 3,356 crore reported in similar fiscal of last year.

Net Interest Income saw growth of 17.55% to Rs 8,309.09 crore in Q4 versus Rs 7,068.51 crore in Q3FY16.

Asset quality was almost stable during the quarter with gross non-performing assets (NPA) in percentage terms standing at 1.05% compared to 0.97% in Q3FY16 and 1.02% in Q2FY17.

Provisions and contingencies for Q3 were Rs 715.8 crore as against Rs 653.9 crore for the corresponding quarter last year.

What to expect from Q4FY17

Nilesh Parikh, Kunal Shah and Prakhar Agarwal of Edelweiss Financial Services said, “Loan growth to be lower than historical trend. Core revenue momentum will be softer and below trend. Asset quality trends continue to remain benign.”

Analysts at Motilal Oswal said, "Loan growth will be moderate at 12% on year-on-year (YoY) basis, in line with the moderate growth environment in the system which is still 2x system growth."

Motilal further said, " We expect healthy deposit growth of 18% YoY led by strong CASA (current account and savings account inflows in Q4, despite Rs 300 crore of FCNR (B) redemption."

While Manish Agarwalla, Pradeep Agrawal and Paresh Jain analysts at Philip Capital said, "Traction in NII continues will be driven by credit growth. While improvement in cost‐to‐income ratio will be recorded on the back of operating profit. Also decline in credit‐cost on qoq basis, driven by recovery. "

As for asset quality, these analysts expect it to remain stable with gross NPA ranging at 1%.

Motilal said, "Moderate Pre-Provision Operating Profit growth would lead to 16% YoY PAT growth, lower than the trend rate of 20%."

Motilal expects HDFC Bank's net profit at Rs 3,897.2 crore up 15.49% yoy and sequentially up 0.82% on qoq basis. While NII is expected at Rs 8,521.3 above 10.70% yoy and 2.55% qoq.

On the other, analysts at Phillip Capital expects net profit at Rs 4,051.9 crore rising by 20.1% yoy and 4.8% qoq. NII at Rs 8,720.4 crore increasing by 17% yoy and 5% qoq.

Systematix said net profit is seen at Rs 4,401.3 growing by 30.4% yoy and 13.9% qoq and NII at Rs 8,873.3 crore increasing by 19.1% yoy and 6.8% qoq.

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