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HDFC Bank Q2 Review - Strong Growth Outlook; Asset Quality Tailwinds Remain: Dolat Capital

HDFC Bank Q2 Review - Strong Growth Outlook; Asset Quality Tailwinds Remain: Dolat Capital

An HDFC Bank Ltd. logo sits in a bank branch in Mumbai, India. (Photographer Abhijit Bhatlekar/Bloomberg News)
An HDFC Bank Ltd. logo sits in a bank branch in Mumbai, India. (Photographer Abhijit Bhatlekar/Bloomberg News)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

HDFC Bank Ltd. reported net interest income and pre-provision operational profit and growth of 12% and 14% YoY respectively, in line with expectations.

Net interest margin was stable QoQ at 4.1%, despite lower slippages and increased current account and savings account/retail/small and medium enterprise traction, the benefits of which will gradually accrue over the ensuing quarters.

Slippage ratio at 1.8% was better than expected, which along with better recoveries aided a sequential decline in gross non performing asset ratio.

However, HDFC Bank restructured Rs 147 billion or 1.2% under resolution plan 2.0, with total restructured pool at 1.5% of loans.

However, management does not expect more than 10-20 basis points gross non performing asset impact because of this.

Click on the attachment to read the full report:

Dolat Capital HDFC Bank Q2FY22 Result Update.pdf

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