HDFC Bank Q2 Review - Strong Earnings Visibility: Axis Securities
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Axis Securities Report
HDFC Bank Ltd.’s Q2 FY22 earnings performance was strong led by higher loan growth, better fee income, and lower provisions.
Net interest income growth of 12% YoY/ 4% QoQ was led by good loan traction of 15.5%/4.5% YoY/QoQ and stable net interest margin.
We believe with accelerated growth expected in retail/commercial/rural will lead to improved margins from H2 FY22 onwards.
Fee income growth improved, up 25.5% YoY and 27.3% QoQ.
Pre provision operating profit was up 14.4% YoY and 4.4% QoQ while core pre provision operating profit was up 18.2% YoY and 4.1% QoQ.
HDFC Bank's asset quality improved further with a lower core slippage ratio of ~0.5% versus ~0.6% QoQ and gross non performing assets/ net non performing assets of 1.35%/0.4%.
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