For shareholders to determine the most attractive companies to include in their portfolio, they adopt the role of detectives who analyse hints constantly. One of the most essential pieces of evidence they consider is the company’s financial performance through its quarterly earnings reports.
To this extent, it is particularly true about HDFC Bank share, which is India’s largest privately owned lender. Investors will be keenly waiting whether or not HDFC Bank managed to beat analyst estimates while publishing its Q4 results.
If this happens, then this can be interpreted as a strong vote of confidence in the bank’s ability to generate profits and could potentially lead to an increase in stock prices.
Now, let us delve deeper into HDFC Bank’s Q4 results and see if the market was impressed with its performance.
About HDFC Bank
HDFC Bank, established in August 1994 under the name HDFC Bank Limited, is considered one of India’s leading private banks. The bank officially began its operations as a Scheduled Commercial Bank in January 1995, with its registered office located in Mumbai, India.
HDFC Bank provides an extensive array of financial and banking solutions, encompassing services in retail and wholesale banking, as well as treasury operations. As of February 2024, HDFC Bank boasts approximately 8,192 branches and 20,760 ATMs or Cash Recycler Machines spread across nearly 3,836 towns and cities.
All of HDFC Ltd.’s distribution network, including 737 outlets comprising both HDFC Sales Private Limited’s offices and that of HDFC, have merged into this bank’s network. This financial institution has branches in four countries and maintains three representative offices in Dubai, London, and Singapore. These offices cater to Non-Resident Indians and Persons of Indian Origin by offering home loan products.
As of 31st December 2023, FIIs/FPIs held around 45.6% of HDFC Bank, ADR at 13.5%, Mutual Funds at 16.8%, Individuals at 11.7%, Insurance companies at 7.8% and the remaining with others.
Must read: Basic banking terms
Quarterly performance
HDFC Bank Q4 results
On April 20, HDFC Bank announced a net profit of ₹16,511 crore for the January-March quarter (Q4) of the fiscal year 2023-24. This represents a modest increase of 0.84% from the ₹16,373 crore recorded in the preceding quarter.
The bank’s net interest income (NII) rose to ₹29,007 crore, up from ₹28,470 crore in the previous quarter.
In terms of asset quality, the bank’s gross non-performing asset (NPA) ratio decreased to 1.24% from 1.26% in the last quarter. Conversely, the net NPA ratio for the quarter was slightly higher at 0.33%, compared to 0.31% in the previous quarter.
Also read: Meta q4 results
QoQ performance
| FY24 (₹ billions) | ||||
| 1Q | 2Q | 3Q | 4Q | |
| Net Interest Income | 236.0 | 273.9 | 284.7 | 290.07 |
| % Change (Y-o-Y) | 21.1 | 30.3 | 23.9 | 24.5 |
| Operating Profit | 187.7 | 226.9 | 236.5 | 292.74 |
| Profit before Tax | 159.1 | 197.9 | 194.3 | 157.62 |
| Net Profit | 119.5 | 159.8 | 163.7 | 165.12 |
| % Change (Y-o-Y) | 30.0 | 50.6 | 33.5 | 37.1 |
Operating Parameters
| FY24 (₹ billions) | ||||
| 1Q | 2Q | 3Q | 4Q | |
| Deposit | 19,131 | 21,729 | 22,140 | 23,798 |
| Loan | 16,157 | 23,312 | 24,461 | 25,078 |
| Deposit Growth (%) | 19.2 | 29.8 | 27.7 | 26.4% |
| Loan Growth (%) | 15.8 | 57.5 | 62.3 | 55.4 |
HDFC Bank results Q4 – Expectations vs reality
As per Elara Securities’ estimates, HDFC Bank is likely to report a ₹16,163 crore net profit for the quarter ended March 2024, a rise of 34.2% over ₹12,047.5 crore in the year-ago quarter. However, there could be a decline in the bank’s net profit by 1.3% on a sequential basis from Q3FY24.
Net interest margin (NIM) recovery may take longer because changing loan constructs, transitionary liquidity requirements or systemic challenges on deposits are several variables at play that can make it unsteady.
Further, as per Motilal Oswal, margins for the March quarter are expected to remain relatively steady, as is asset quality for the combined company. Guidance on business growth and earnings trajectory will be essential monitorables. This brokerage expects HDFC Bank share to post a net profit of ₹15,653 crore (up 29.9% YoY). Net interest income (NII) is anticipated to grow by 24.8% to reach ₹29,144 crore.
The below HDFC Bank results Q4 2024 estimates are according to Motilal Oswal:
| Analysts’ Predictions (₹ billions) | Actual Figures | Expectations (Above/Below) | |
| Net Interest Income | 291.4 | 290.07 | In line |
| Operating Profit | 242.6 | 292.74 | Above |
| Profit before Tax | 207.6 | 157.62 | Below |
| Net Profit | 156.5 | 165.12 | Above |
HDFC Bank competitors
Here are some of the market competitors of HDFC Bank, ranked by their market capitalisation as of 22nd April 2024:
- ICICI Bank – ₹762,966.25 crores
- Kotak Mahindra – ₹359,813.68 crores
- Axis Bank – ₹325,571.86 crores
Stock price
If we look at the HDFC Bank share price history, it has given a return of 32.69% in the past five years and a negative return of 10.32% in the past one year (as of 22nd April 2024).
Now, let’s talk about HDFC Bank’s share price target. Here are some price targets from various research agencies.
- Anand Rathi – the target of ₹1,620 maintaining stop loss at ₹1,440 per share level.
- Jefferies maintained its ‘buy’ rating – target price of ₹1,800.
- Citi – maintained a buy call – target price of ₹2,050.
- HSBC – buy call – target price of ₹1,750.
- Motilal Oswal – target price – ₹1,950.
Also read: NBFC
Bottomline
Do not forget that investing in a specific company demands more than looking at its earnings. While revenue is important, a well-rounded approach to considering all the different aspects of a company might be a better way of making an investment with greater prospects for profit.
This comprehensive analysis helps shareholders choose the most attractive options for their portfolio, thus creating a balanced and profitable investment strategy.
