HDFC Bank Limited (also known as HDB) is an Indian banking and financial services company headquartered in Mumbai. It is India’s largest private sector bank by assets and world’s 10th largest bank by market capitalization as of April 2021. It is the third largest company by market capitalization of $127.16 billion on the Indian stock exchanges. It is also the fifteenth largest employer in India with nearly 150,000 employees.
Quarterly Earnings Growth
HDFC Bank reported a profit before tax of ₹15,936 crore for the last quarter of the previous financial year. The Bank earned a net profit of ₹12,047 crore, which is a growth of 20% over the quarter that ended during March 31, 2022. Considering the year, net profit was computed at ₹44,109 crore which is up by 19% YoY.
Yearly Performance
Net interest income (NII) which is the difference between interest earned minus the interest expended, in Q4FY23, has surged by 24% to ₹23,352 crore from ₹18,873 crore in Q4FY22. Core net interest margin was at 4.1 % on total assets, and 4.3% based on interest-earning assets.
The Bank’s revenue was computed at ₹32,083 crore for the last quarter, which has risen by 21% YoY.
Overall, in FY23, the bank reported a total income of ₹192,800 crore as compared to ₹157,263 crore for the year ended March 31, 2022. Net revenues (net interest income plus other income) for the year ended March 31, 2023, were at ₹118,057 crore, as against ₹101,519 crore for the year ended March 31, 2022.
Advances & Retail Loans
The Bank’s total advances were computed at ₹1,600,586 crore, which is a rise of 17% YoY. According to business segments, domestic retail loans have grown by 21%, commercial and rural banking loans have grown by 30%, and corporate and other wholesale loans have grown by 12%. Overseas advances formed 2.6% of total advances.
HDFC Bank’s total retail advances were computed at ₹634,578 crore as compared to ₹531,767 crore in Q4FY22.
Deposits, Provisions & Asset Quality
The bank witnessed vigorous growth in terms of total deposits which were computed at ₹1,883,395 crore by end of Q4FY23. This is a growth of 21% over March 31, 2022.
CASA deposits have grown by 11% with savings account deposits at ₹562,493 crore and current account deposits at ₹273,496 crore.
The bank’s provisions and contingencies have declined rapidly to ₹2,685.4 crore as compared to ₹3,312.4 crore in Q4 of FY22.
HDFC Bank’s gross NPA declined to 1.12% of gross advances in Q4FY23 as compared with 1.23% in Q3FY23 and 1.17% in Q4FY22. The Q4FY23 gross NPA is excluding 0.94% NPAs in the agricultural segment, which was computed at 1% and 1.01% in Q3FY23 and Q4FY22.
Declaration of Dividend
The bank’s board recommended a dividend of ₹19.0 per equity share having a face value of Re 1 each, as against ₹15.5 per equity share paid in the previous fiscal.
Expansion of Reach
As of March 31, 2022, HDFC Bank’s distribution network was at 7,821 branches and 19,727 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 3,811 cities/towns as against 6,342 branches and 18, 130 ATMs / CDMs across 3, 188 cities/ towns as of March 31, 2022.
52% of its branches are in semi-urban and rural areas. Also, the bank has 15,921 business correspondents, which are primarily manned by Common Service Centres (CSC).
The bank made a net addition of 31,643 employees to 173,222 for the period ending March 31, 2023, compared to 141,579 as of March 31, 2022.
HDFC Bank stock price has rallied to its lifetime high, and the price is currently in the distribution zone which is marked by the yellow rectangular box. The stock appears to be highly bullish and is facing heavy resistance at the current level. We might see a breakout in the coming days, if the resistance is not strong enough and the stock is highly bullish on the back of a strong financial year and vigorous growth across all segments. The price has overextended above the 200-day exponential moving average and MFI is at 74 points which makes the stock highly overbought. Traders can short this stock with a strict risk management system as the technical analysis shows a triple top candlestick pattern.
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