In a financial feat that has left investors and analysts impressed, HDFC Bank has recently announced its Q4 results, showcasing a remarkable net profit of Rs 16,511.85 crore for the quarter of the financial year that ended in March 2024. This substantial growth of 37% from Rs. 12,045 crores in the same quarter last year reflects the bank’s resilience and strategic financial management.
Highlights of HDFC’s Q4 results
The Bank on 20th April posted its Q4 results where it reported its net profit to be Rs 16,511.85 crore, this was almost in line with what the market estimated – Rs. 16,576 crores, a fewer crore less. Here are the salient features of the report:-
- Net Profit Surge: The bank’s net profit is in line with analyst estimates of Rs 16,576 crore. This impressive figure underscores the Bank’s ability to adapt and thrive amidst market fluctuations.
- Dividend Declaration: The bank’s board of directors has recommended a dividend of Rs 19.5 per equity share for the year ended March 31, 2024. This translates to a 1950% dividend yield based on the face value of Rs 1 per share. Shareholders can rejoice as this dividend distribution reflects the bank’s commitment to rewarding its investors.
- Provisions and contingencies for the quarter were reported to be Rs 13,500 crore which included floating provisions of Rs 10,900 crore, as per what the bank said.
- Merger with HDFC: In July 2023, the Bank merged with its home loan-focused parent, streamlining operations and enhancing synergies. This strategic move has contributed to the bank’s robust financial performance. However, the bank’s YoY financial results are not comparable due to the coalition with the parent entity HDFC Ltd during the year.
- Net Interest Income (NII): HDFC Bank’s core NII for the reporting quarter stands at an impressive Rs 29,007 crore which has escalated from its previous quarter’s Rs. 28, 470 crore. The NII has been noticed as lesser than the market estimation of Rs. 29,172 crores.
- The net revenue of the lender increased to Rs 47,240 crore including transaction profits of Rs 7340 crore from the stake sale in subsidiary HDFC Credila Financial Services during the quarter.
- Asset Quality: The gross non-performing assets (NPAs) ratio remained low at 1.24%, demonstrating prudent credit risk management. The NPA ratio dropped from 1.26% in the last quarter. However, the net NPA for the quarter is at 0.33% as compared to 0.31%.
Here’s what the experts say
Market experts have lauded HDFC Bank’s performance, emphasizing its stability, prudent risk management, and customer-centric approach. The bank’s ability to resort to regulatory changes, technological disruptions, and economic uncertainties has positioned it as a leader in the Indian banking sector.
CFO Srinivasan Vaidyanathan while announcing the results said the bank would not need to use pricing to grow its deposits. He said, “We are not looking at price to be an incentive to bring in the deposits,”. He also added that the credit-deposit ratio adjusting for the impact of the merger was in line with pre-merger trends.
As per Money control, HDFC Bank has also done a write-back of around Rs 200 crore or 20 percent on its provisions made to its alternative investment funds (AIFs), said Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. “We have released around 200 crores from our provisions to our AIFs investments. This is around 20 percent of our total provisioning,” Vaidyanathan reported at a post-result press conference on April 20.
“Our AIF book is Rs 1,220 crore and the current applicable Reserve Bank of India (RBI) circular asks us to take a provision on that by January 18. On a prudent basis, we have done the assessment and taken the provision now. We have made a contingent provision of 100 percent of our AIF book,” Vaidyanathan continued.
As the Indian economy continues to recover, HDFC Bank remains well-positioned to capitalize on growth opportunities. Its commitment to innovation, digital transformation, and customer satisfaction bodes well for success in FY25.
HDFC Bank’s robust Q4 results, and generous dividend declaration reinforce its status as a financial powerhouse, dedicated to creating value for shareholders and contributing to India’s economic resilience.
