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HDFC Bank Q1 Earnings: Key things to watch out for

Updated : July 19, 2019 02:51 PM IST

Private lender HDFC Bank is set to report its first-quarter results on Saturday. The stock is witnessing severe pressure ahead of its Q1 earnings. Here are the key things to watch out for:

  • In terms of the balance sheet, deposits have grown by 18.5 percent year-on-year (YoY) and about 3.5 percent sequentially. On a YoY basis, this is the second-lowest deposit growth rate in the last six quarters.

  • Loan growth has grown at 17.1 percent YoY and about 1.2 percent sequentially. This is perhaps the lowest loan growth that HDFC Bank has recorded in the last 10 quarters.

  • It has also reported a low-cost deposit ratio at 40 percent which is the lowest ratio in the last 12 quarters. The net interest margin (NIM) was at 4.4 percent in the previous quarter which is at a seven quarter high.

  • Analysts are working with stable asset quality.

  • Slippages are expected at around Rs 3,500 crore compared to about Rs 3,580 crore in the previous quarter. So, the gross non-performing assets (GNPA) ratio can be around 1.3-1.4 percent.

  • According to CNBC-TV18 poll, net interest margin (NIM) growth is expected at close to 22.1 percent while net profit is expected to grow at 21.9 percent. However, sequentially NII growth is expected to grow up by 0.8 percent while net profit can increase by 4.7 percent.
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