HDFC Q3 Result Preview: Double digit rise in profit likely

The company is slated to post its earnings later today.

Sharekhan is expecting the housing finance company to report an 8.6 per cent YoY rise in net profit at Rs 3,178 crore. NII is seen rising 1.1 per cent to Rs 4,049 crore. The pre-provision operating profit is seen growing 2.3 per cent YoY to Rs 4,446 crore. Net interest margin may shrink 58 basis points YoY to 2.7 per cent, Sharekhan said, thanks to moderation in yields and excess liquidity carry.

Overall, disbursement for individual loans is expected to be strong, with individual loans growing 4 per cent sequentially. AUM is likely to grow 12 per cent YoY.

“HDFC is expected to post healthy growth in business led by improving traction in real estate sales. NIMs should remain largely steady at 3.6 per cent. Credit cost for the quarter should decline to 0.08 per with a steady show on asset quality. As a result, HDFC is estimated to post a net profit of Rs 3,408 crore, up 16.5 per cent YoY. The uptick in GNPA ratio expected led by harmonisation of IRACP norms, though credit cost is not expected to be impacted,” ICICIdirect said.

Prabhudas Lilladher sees HDFC’s profit at Rs 3,304 crore, up 12.9 per cent YoY.

Corporate disbursements for HDFC are yet to pick up meaningfully and we expect these to improve with a two-quarter lag, said Motilal Oswal Securities.

This brokerage expects core business profit to rise 13.5 per cent YoY to Rs 3,056 crore. It sees NII growing 0.6 per cent at Rs 4,028.50 crore.

“Disbursements in individual loans have been strong with non-individual disbursements still relatively muted. Watch out for asset quality in the corporate segment and commentary on non-individual segment growth,” it said.