While deposit growth is expected to be strong, supported by strong FCNR(B) inflows, pressure on margins is seen.
The company is slated to post its earnings on Saturday, October 17. This will mark the last earnings report under Sashidhar Jagdishan, whose tenure ends later this month on October 26. ICICI Group veteran Anup Bagchi is set to replace Jagdishan.
The banks are expected to see a stable quarter, with Kotak Institutional Equities (KIE)expecting ~11 per cent year-on-year (YoY) growth. Private banks could report 20 per cent YoY earnings growth (lower base in select banks like IndusInd Bank and Axis Bank) and PSU banks to report flat earnings decline factoring in the recent disclosure from Bank of Baroda.
Here’s what to expect from HDFC Bank
Kotak Institutional Equities
The brokerage sees profit after tax growing 4.7 per cent YoY and 2.4 per cent quarter-on-quarter (QoQ) to ₹19,510 crore in Q2 FY27, while the net interest income (NII) is seen rising 7.7 per cent YoY and 1.4 per cent QoQ to ₹33,987.8 crore.
“We expect gross NPL ratio to be stable with slippages at 1.2% of loans. Near-term focus would be the progress of NIM, impact of FCNR deposits and execution under the new management,” it noted.
Axis Direct
According to Axis Direct, PAT is seen at 19,607 crore, up 5.2 per cent YoY and 2.9 per cent QoQ. Meanwhile, the NII could rise 8 per cent to ₹34,091 crore.
Credit growth is seen to be healthy and will be remain broad-based and strong FCNR(B) to support deposit growth. Meanwhile, NIMs are likely to moderate slightly by ~6bps QoQ, the brokerage said.
“Operating efficiency gains to keep opex ratios contained, while healthy fee income to offset lower treasury. Do not expect any challenges of AQ, credit costs seen to be steady,” said the brokerage, while adding that margin trajectory and management commentary on deposit accretion are key monitorables.
Jefferies
Global brokerage Jefferies sees a 5 per cent rise in NII to ₹33,000 crore while profit could remain unchanged. It sees a moderation in provisions of 11 per cent YoY to ₹18,600 crore.
Loan and deposits are seen growing in high teens by 16 per cent and 19 per cent, respectively, according to Jefferies.
Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.
