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View Promises →HDFC Bank Ltd — Q2 FY24
HDFC Bank reported a strong Q2 FY24, its first post-merger with HDFC Ltd.
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HDFC Bank reported a strong Q2 FY24, its first post-merger with HDFC Ltd. Net profit surged 50% YoY to ₹15,976 crore, driven by robust deposit and loan growth. Deposits grew 5.3% sequentially (₹1.1 lakh crore), with 83% retail, while advances rose 4.9% sequentially (₹1.0 lakh crore). Net interest margin (NIM) was 3.65% on total assets, absorbing ~25 bps drag from excess liquidity and ICRR. Asset quality remained stable with GNPA at 1.34%. Management expressed confidence in sustaining growth and profitability (ROA 1.9-2.1%), with plans to expand construction finance and cross-sell. Key risk: potential normalization of credit costs from current benign levels.
HDFC बैंक ने HDFC लिमिटेड के साथ विलय के बाद पहली बार Q2 FY24 में शानदार नतीजे दिए। मुनाफा पिछले साल की तुलना में 50% बढ़कर ₹15,976 करोड़ हो गया। इसकी वजह जमा और कर्ज में जबरदस्त बढ़ोतरी है। जमा पिछली तिमाही से 5.3% बढ़ी, जिसमें 83% आम लोगों की बचत है। कर्ज 4.9% बढ़ा। बैंक की ब्याज कमाई दर (NIM) 3.65% रही, जो थोड़ी कम है क्योंकि बैंक के पास ज्यादा नकदी थी। खराब कर्ज (GNPA) 1.34% पर स्थिर है। प्रबंधन को भरोसा है कि मुनाफा 1.9-2.1% (ROA) रहेगा और वे कंस्ट्रक्शन फाइनेंस बढ़ाएंगे। खतरा: कर्ज वसूली लागत सामान्य हो सकती है।
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Credit cost normalization
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Read Transcript →Quarter Snapshot
Deposit Growth (Sequential)
₹1.1 lakh crore
+5.3% QoQ
Total deposits grew by ₹1.1 lakh crore sequentially, with 83% from retail, demonstrating strong franchise execution.
Loan Growth (Sequential)
₹1.0 lakh crore
+4.9% QoQ
Advances grew by ₹1.0 lakh crore sequentially, driven by retail, CRB, and wholesale segments.
CASA Ratio
37.6%
- (post-merger impact)
CASA ratio stood at 37.6% after absorbing HDFC Ltd's time deposits, reflecting the merger's impact.
Branch Network
7,945
+1,446 YoY
Branch network expanded to 7,945 outlets, with 85 new branches added in the quarter, supporting growth.
What Changed vs Last Quarter
NEW
Construction finance book to grow steadily
The bank plans to grow the construction finance portfolio, which will support top-line and margin recovery.
NEW
NIM recovery over time via better mix
Margins are expected to improve as the bank substitutes high-cost debt with deposits and shifts loan mix towards retail.
UPDATED
ROA maintained at 1.9%-2.1%
Management reiterated its ability to maintain return on assets in the 1.9%-2.1% range, consistent with historical performance.
DROPPED
Loan growth of 17-18% for FY24
Management expects full-year loan growth in the 17-18% range, consistent with historical doubling every 4-5 years.
DROPPED
Retail deposit accretion of ~INR 1 trillion per quarter
Management indicated that the capacity built should enable retail deposit accretion of around INR 1 trillion per quarter, though Q1 was seasonally lower.
NEW RISK
Margin compression from excess liquidity
The 25 bps drag from ICRR and debt-funded liquidity may persist longer than expected, delaying NIM recovery.
NEW RISK
Non-retail NPA slippage from HDFC Ltd book
Though management downplays risk, the inherited non-retail book has some tail risk of further slippage.
RISK GONE
Deposit market share loss
QoQ deposit growth was only 1.6% (INR 30,000 crore), significantly below system growth of ~5%, raising concerns about market share loss.
RISK GONE
High credit-deposit ratio post-merger
The merged entity's credit-deposit ratio is ~109%, well above the bank's historical ~84%. Bringing it down will take 3-4 years and may constrain growth.
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Guidance and risk preview
Management reiterated its ability to maintain return on assets in the 1.9%-2.1% range, consistent with historical performance.
Current credit costs at 49 bps are below historical mean of ~80-100 bps; reversion could pressure profitability.
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