ICICI Securities expects HDFC Bank to recover in next 2-3 quarters

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HDFC Bank reported its Q1FY22 earnings over the weekend. It reported a 14.36 percent growth in its consolidated net profit at Rs 7,922 crore. The June quarter profit has declined against the March quarter’s Rs 8,433 crore. Kunal Shah, analyst at ICICI Securities, discussed the numbers.

HDFC Bank reported its Q1FY22 earnings over the weekend. It reported a 14.36 percent growth in its consolidated net profit at Rs 7,922 crore. The June quarter profit has declined against the March quarter’s Rs 8,433 crore. Kunal Shah, analyst at ICICI Securities, discussed the numbers.
“Net interest income (NII) for the first time in last one decade has come below sub-10 percent and the slippages were relatively higher than the expectations at 2.54 percent. That is going to be the phenomena in this quarter,” he said.
When asked if ICICI Securities has cut its estimates or target price on HDFC Bank post these numbers, he replied, “Not really - it is hardly a couple of percentage points earnings cut. Overall, when we look at it in terms of next two-three quarters, there could be a recovery in the offing.”
“The recovery should come through and we will wait for three quarters before revising the earnings at this point in time,” he added.
He expects the second half to be relatively better for the bank.
He believes, from the opening up of the lockdowns and the restrictions, there will be recoveries from the slippages, which had been seen in this quarter.
For the full interview, watch the accompanying video.