HDFC Bank share rises over 2% on strong Q2 earnings

HDFC  Bank share rose over 2% in early trade after the lender announced a 18.4 per cent rise in net profit during September quarter of current fiscal. Rise in net interest income and pre-provision operating profit helped the bank post positive earnings in Q2.

Share of HDFC Bank rose 2.49% to an intraday high of Rs 1228.8 against previous close of Rs 1199 on BSE.

The stock opened at Rs 1,220, rising 1.72% against its closing price.

HDFC Bank stock trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages.  

The share has lost 2.25% in one year and fallen 5.53% since the beginning of this year. In one month, the stock has gained 13.63%. Total 5.55 lakh shares changed hands amounting to turnover of Rs 67.07 crore on BSE. Market cap of the firm rose to Rs 6.62 lakh crore.

The private lender reported net profit of Rs 7,513.1 crore in Q2 against Rs 6,345 crore profit in the year-ago period.

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Jaikishan Parmar, senior Equity Research Analyst at Angel Broking said," Currently, HDFC Bank is trading at 3.15 times FY22 ABV, which is lower compared to the historical average. We have a positive view on HDFC Bank considering, reporting superior return ratio across the cycle and healthy provision coverage provide comfort on asset quality concern."

Net revenue rose 14.47% to Rs 21,868.8 crore in Q2  compared to Rs 19,103.8 crore corresponding period of previous fiscal. Net interest income (NII) gained 16.7 per cent during the second quarter to Rs 15,776.4 crore from Rs 13,515 crore in the corresponding quarter last fiscal. NII rose after assets grew 21.5 per cent and a core net interest margin of 4.1 per cent during the quarter under review.

HDFC Bank Q2 net profit jumps 18% to Rs 7,513 crore; loan, card momentum improves

"While the previous quarter largely bore the brunt of the COVID-19 pandemic, some of the softness continued into the current quarter leading to lower retail loan origination, use of debit and credit card by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees and other income were lower by approximately Rs 800 crore. However, the loan and card momentum improved over the previous quarter, thereby reducing the gap to less than half," the lender told the exchanges.

Gross and net non-performing assets (NPAs) for the second quarter of FY21 stood at 1.08 per cent of gross advances and 0.17 per cent of net advances, respectively.