HDFC Bank (NYSE:HDB) Posts Quarterly Earnings Results, Hits Estimates

HDFC Bank (NYSE:HDB) released its quarterly earnings data on Saturday. The bank reported $0.40 earnings per share for the quarter, meeting the consensus estimate of $0.40, reports. The firm had revenue of $5.10 billion during the quarter, compared to analysts’ expectations of $4.92 billion. HDFC Bank had a net margin of 15.96% and a return on equity of 11.84%.

Here are the key takeaways from HDFC Bank’s conference call:

• Business momentum improved: deposits rose 18.8% year over year and AUM increased 15.3%, while retail disbursements, credit-card issuance, and MSME lending accelerated. Management also cited stronger branch productivity and faster service turnaround times.
• Asset quality remained resilient, with GNPA at 1.11% and credit costs at 44 basis points. Reported quarterly profit was approximately INR 19.5 billion, up 12.7% excluding trading gains, with ROA holding near 1.8%.
• Management indicated that net interest margins may have reached a bottom at 3.32%, with repricing of the largely floating-rate loan book expected to provide a tailwind from the next quarter. However, the full-quarter cost impact of FCNR deposits will partly offset this benefit.
• Incoming CEO Anup Bagchi said he will first consult regulators, customers, shareholders, and employees before presenting priorities on growth, margins, asset quality, productivity, and capital deployment in the coming months.
• Liability metrics remain an area of concern: retail deposit momentum was obscured by large one-off outflows, the bank continued using wholesale funding including certificates of deposit, and LCR stood at 113%. Management said it aims to keep LCR around 110%–120% while rebuilding core retail liabilities.

HDFC Bank Stock Performance

Shares of NYSE HDB traded down $0.74 during midday trading on Monday, hitting $23.10. 2,071,377 shares of the company’s stock traded hands, compared to its average volume of 9,073,878. HDFC Bank has a 1 year low of $21.70 and a 1 year high of $37.45. The stock has a market capitalization of $118.54 billion, a price-to-earnings ratio of 13.60, a price-to-earnings-growth ratio of 1.16 and a beta of 0.61. The firm has a fifty day moving average of $22.91 and a 200 day moving average of $24.26.

Analysts Set New Price Targets

A number of equities research analysts have commented on the stock. The Goldman Sachs Group assumed coverage on shares of HDFC Bank in a research report on Friday, August 21st. They issued a “buy” rating for the company. HSBC lowered shares of HDFC Bank from a “buy” rating to a “hold” rating and decreased their target price for the company from $30.80 to $26.10 in a research note on Monday, August 31st. Wall Street Zen cut HDFC Bank from a “hold” rating to a “sell” rating in a report on Saturday, July 18th. Zacks Research upgraded HDFC Bank from a “strong sell” rating to a “hold” rating in a research note on Friday, July 17th. Finally, Weiss Ratings downgraded HDFC Bank from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Friday, September 25th. One analyst has rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company presently has an average rating of “Hold” and a consensus target price of $26.10.

HDFC Bank Company Profile

HDFC Bank Limited is an Indian banking and financial services company headquartered in Mumbai, India. Established in 1994, the bank provides services to individuals, businesses, corporations and institutions through a broad network of physical branches, ATMs and digital banking channels.

Its principal offerings include savings and current accounts, deposits, personal and home loans, vehicle and consumer financing, business and commercial lending, credit and debit cards, payments, investment and wealth-management services, and foreign-exchange and treasury products.