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HDFC Bank Profit Edges Up, Stock Dips 5%
21 Jul
Summary
- HDFC Bank reported a 5% YoY net profit increase to Rs 19,060 crore.
- Net interest income rose 7% YoY to Rs 33,534 crore.
- Stock price declined 5% after the Q1 FY27 earnings announcement.
HDFC Bank's Q1 FY27 standalone net profit reached Rs 19,060 crore, a modest 5% increase from the previous year. The bank's net interest income grew by 7% year-on-year to Rs 33,534 crore for the April-June quarter. However, this performance did not satisfy investors, leading to a 5% drop in the bank's share price on Monday.
Analysts have provided varied perspectives. Motilal Oswal reiterated a 'Buy' rating with a target price of Rs 2,050, anticipating future margin improvements as high-cost borrowings mature. JM Financial maintained an 'Add' rating, setting a target price of Rs 900, and expects medium-term margin expansion, while noting that loan growth has been primarily driven by the wholesale segment.
Asset quality metrics showed gross non-performing assets decreasing over the year, though net NPAs saw a slight increase. Provisions declined significantly year-on-year, but increased sequentially. The bank's Capital Adequacy Ratio remained robust, slightly below previous periods.
