HDFC Bank Q3 results: Profit likely to rise by 3%, key highlights to watch

The financial world is abuzz as HDFC Bank, one of the largest private lenders, gears up to announce its Q3 results. With a forecasted 0–3% growth in net profit for the December quarter, here's a breakdown of what to expect and the critical metrics to track for your share market investment strategy.

1. Profit growth and net interest income (NII)

• Net profit: Analysts predict HDFC Bank's net profit to range between ₹16,264 crore and ₹16,900 crore. This is a modest 0–3% year-on-year (YoY) growth compared to ₹16,373 crore in the same quarter last year.
• Net interest income (NII): NII is expected to grow 6–8% YoY, estimated between ₹30,335 crore and ₹30,778 crore. This rise is supported by stable net interest margins (NIM), anticipated to remain flat or show a slight positive bias sequentially.

2. Asset quality and provisions

• Provisions: Provisioning is likely to increase 18.6% sequentially to ₹3,203 crore but could see a 24% drop YoY from ₹4,217 crore in the same period last year.
• Asset quality: Slippages are expected to remain controlled, ensuring stability in asset quality. Credit costs as a percentage of total loans are projected at 0.45%, while slippages are estimated at ₹8,200 crore.

Key metrics to monitor

1. Loan and deposit growth: Deposit growth is likely to outpace credit growth this quarter, with the loan-to-deposit ratio (LDR) showing marginal improvement. However, credit growth may lag behind the industry average.
2. Operating performance: Pre-provision operating profit (PPOP) is seen at approximately ₹25,098 crore, reflecting stable operational efficiency.
3. Management commentary: All eyes will be on the HDFC bank's outlook on deposit accretion, credit growth, and NIM improvement trajectory. These factors are pivotal for long-term share market investment strategies.

Why this matters for share market investors

The results are expected to showcase HDFC Bank's resilience despite economic challenges, with stable margins and controlled costs. HDFC Bank shares rose by 0.26%, trading at ₹1,646 as of 12:33 PM on January 22, 2025. For those looking at share market investment, monitoring the bank's credit growth, deposit trends, and NIM progress will offer valuable insights into its future performance.

Stay tuned for the detailed results later today, as they could provide significant cues for the banking sector and the broader share market landscape.