HDFC Bank Ltd. is India’s leading private bank with banking network of 7,945 branches and 20,596 ATMs in 3,836 cities/towns. It offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments: Wholesale Banking Services, Retail Banking Services and Treasury. The services offered by the bank include Personal Accounts & Deposits, Loans, Cards, Forex, Investments and Insurance.

Result Analysis: HDFC bank (CMP: Rs.1529.50) Result Update: Q2FY24
Stock Details
Market Cap. (Cr.) 1159638.75
Equity (Cr.) 758.18
Face Value 1
52 Wk. high/low 1758 / 1427
BSE Code 500180
Book Value (Rs) 552.54
Sector Banks


Key Ratios
ROE (%): 17.20
TTM EPS: 71.85
P/BV: 2.77
TTM P/E: 21.29


Result Highlights:

  • HDFC bank reported a healthy first quarter with consistent operating profit and strong business growth. Bank’s PAT grew by 50.6% YoY to Rs.15,976 cr. on the back of lower provisioning while the Interest income grew hugely by 75.4% YoY to Rs.67,698 cr.
  • On a standalone basis, Net Interest Income grew by 30.3% YoY to Rs.27,385 cr. while Net Interest Margin declined to 3.4% due to ICRR and excess liquidity in the economy.
  • On Pro-forma basis, Gross advances grew by 1.08 lakh cr. in the quarter to Rs.21,72,858 cr., an increase of 4.9% QoQ. This growth was led by CRB (9.7% QoQ) & retail (3.1% QoQ), while wholesale grew by 5.8% QoQ.
  • On yearly basis, Domestic retail loans grew by 20%, commercial and rural banking loans grew by 29.1% and corporate and other wholesale loans grew by 11.2%. Overseas advances constituted 2.6% of total advances.
  • Asset quality of the bank has improved on the pro-forma basis with Gross NPA at 1.3% Vs 1.4% QoQ and Net NPA ratio at 0.3% Vs 0.4% QoQ. Among GNPA segment, retail and commercial & rural banking (ex-agri) improved while commercial & rural banking and wholesale segment grew slightly.
  • On Pro-forma basis, CASA ratio declined by 170 bps to 37.6% in Q2FY24 vs 39.4% in Q1FY24 mainly due to higher interest rates on fixed deposits. The cost to income ratio of the bank also improved significantly from 42.8% to 40.4%.
  • HDB Financial Services, subsidiary of HDFC Bank reported robust growth of 43% YoY in disbursements across segments.
  • Bank has added 85 new branches in the quarter and also added 6 mn customers to its customer’s base making it to 91 mn.

Conference Call Highlights:

  • The business momentum has continued to gain pace in the merger quarter with disbursements reaching new high of Rs.480 bn.; ~83-85% of deposits were retail. Change in mix toward more on retail will lead to better margins going forward.
  • The cost to income ratio improved to 40.4% as a merged entity riding on HDFC’s low numbers, management aim to get it to mid-30s as part of a long term vision.
  • NIMs are impacted by 25bp due to excess liquidity & impact of incremental CRR.
  • RoE/RoA stood at 16.2%/2% in 2QFY24 and are expected to improve going forward. The bank aims for ROA of 1.9%-2.1% by end of FY24.
  • Management would continue to focus on digital and technology front, PayZapp 2.0 app has currently 3mn users and handles 0.25mn transactions per day. AI driven channel platform, WhatsApp and chat banking are working smoothly.



HDFC Bank, world’s fourth largest bank reported above market estimates results in the Q2FY24 with 50.6% YoY growth in the Net profits, supported by lower provisioning and lower tax rate in the quarter. After merger, mortgages account for 60% of the retail loan book which would benefit the bank with steady stream of income and risk minimization over the long term. Impressive asset management of the bank is evident through its strong asset quality which were above estimates. Bank’s NIM reached to the low of 3.4% and is expected to improve in the coming quarters on behalf of removal of ICRR. The current P/B ratio stands at 2.77 which is significantly below of 1-yr and 3-yr median P/B of 3.3 and 3.56 respectively. Hence, we remain long on the stock with target price of Rs.1760 for period of 12 months.


Particulars (In Rs. Cr.) Q2FY24 Q1FY24 Q2FY23 QoQ% YoY% H1FY24 H1FY23 YoY%
Interest Earned 67,698 48,587 38,586 39.3% 75.4% 1,16,285 73,758 57.7%
Interest Expended 40,313 24,988 17,565 61.3% 129.5% 65,301 33,256 96.4%
Net Interest Income 27,385 23,599 21,021 16.0% 30.3% 50,984 40,503 25.9%
Operating Profit 22,694 18,772 17,392 20.9% 30.5% 41,466 32,760 26.6%
Provisions 2,904 2,860 3,240 1.5% -10.4% 5,764 6,428 -10.3%
Tax 3,814 3,960 3,546 -3.7% 7.5% 7,774 6,530 19.0%
Net Profit after tax 15,976 11,952 10,606 33.7% 50.6% 27,928 19,802 41.0%
Deposits 21,72,858 19,13,096 16,73,408 13.6% 29.8% 21,72,858 16,73,408 29.8%
Advances 23,31,233 16,15,672 14,79,873 44.3% 57.5% 23,31,233 14,79,873 57.5%


Ratios (%) Q2FY24 Q1FY24 Q2FY23 QoQ YoY
Gross NPA 1.34 1.17 1.23 17 bps 11 bps
Net NPA 0.35 0.30 0.33 5 bps 2 bps
Net Interest Margin 3.40 4.10 4.10 -70 bps -70 bps
Capital Adequacy Ratio 19.5 18.9 18.0 60 bps 146 bps
CASA Ratio 37.6 42.5 45.4 -490 bps -780 bps


Source: Company website, EWL Research

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