Earnings per share (EPS) stood at Rs 18.4, up 6.1 per cent YoY.
At a time when credit growth has slumped to over 2-year low of 7.1 per cent year-on-year (YoY), private sector lender HDFC Bank is expected to report double-digit loan growth for the December quarter of the current fiscal (Q3FY20). Besides, analysts expect the bank’s net profit to jump up to 32 per cent year-on-year (YoY) to Rs 7,379 crore.
The lender, which is slated to report its Q3FY20 earnings on Saturday, January 18, has underperformed at the bourses during the quarter under review. Between October and December 2019, shares of the bank gained 4.45 per cent, as against a 6.8 per cent rise in the benchmark Nifty50 index. Nifty Bank index, on the other hand, advanced over 11 per cent during the period.
Analysts at Prabhudas Lilladher expect the bank to report a net profit of Rs 7,379 crore, up 32 per cent YoY during the period on the back of full tax benefit. Sequentially, the number will be 16.3 per cent higher from Rs 6,345 crore logged in Q2FY20. During Q3FY19, the net profit stood at Rs 5,585.9 crore.
A lower estimate by Phillip Capital; however, pegs the net profit at Rs 6,737.1 crore, up 21 per cent YoY. Besides, they see the pre-provision profit at Rs 11,682.8 crore, up 8.4 per cent YoY, but down 0.1 per cent quarter-on-quarter (QoQ). The Pre-provision operating profit (PPoP) was Rs 11,698 crore and Rs 10,778 .4 crore in Q2FY20 and Q3FY19, respectively.
CUT IN MCLR TO HIT NIM
For the October-December quarter, the net interest margin (NIM) is seen slipping by 10 basis points (bps) YoY, but remaining flat QoQ, from 4.3 per cent in Q3FY19 to 4.2 per cent in Q3FY20.
“Cut in marginal cost-based lending rate (MCLR) is likely to weigh on NIM during Q3FY20…While core revenue momentum is likely to be 16–18 per cent, NIMs would be steady at 4.2–4.3 per cent,” wrote analysts at Edelweiss Securities.
The Mumbai-headquartered bank had cut its MCLR on loans for all tenors by up to 15 bps in December, and by 10 bps in November, 2019.
Net interest income (NII); however, is likely to grow between 11 and 16 per cent YoY to Rs 14,409.5 crore, up from Rs 12,576.8 crore reported in the same quarter last year, and Rs 13,515 crore in the previous quarter of the current fiscal.
DOUBLE-DIGIT LOAN GROWTH, STABLE ASSET QUALITY
“Led by the aggressive festive campaign, HDFC Bank is set to maintain its superior credit growth compared to the industry and increase market share. Credit and deposit growth is seen growing at 20 per cent and 25 per cent YoY to Rs 9.34 lakh crore and Rs 10.68 lakh crore, respectively,” wrote analysts at ICICI Securities in an earnings preview note.
Slightly weaker growth in corporate loan-book could off-set better credit off-take by retail borrowers, bringing the overall loan growth at Rs 9.28 lakh crore (up 18.9 per cent YoY and 3.5 per cent QoQ), say analysts at Prabhudas Lilladher.
On the asset quality front, analysts, on an average, expect the gross non-performing asset (GNPA) ratio to rise marginally by 5 basis points (YoY and QoQ) from 1.38 per cent to 1.43 per cent, while the net NPA (NNPA) ratio is seen flat at 0.4 per cent.
Analysts at Phillip Capital estimate the slippages to come in at Rs 4,500 crore, up 12.5 per cent YoY from Rs 4,000 crore reported in Q3FY19. Sequentially, it would be a rise of 21.2 per cent from Rs 3,714 crore posted in Q2FY20.
Meanwhile, Prabhudas Lilladher sees provisions rising 17.5 per cent YoY to Rs 2,597.5 crore from Rs 2,211.5 crore reported in Q3FY19. It would, however, be a 3.8 per cent decline on a sequential basis from Rs 2,700.7 crore reported in Q2FY20, the brokerage added.
Mid-tier information technology (IT) company Mindtree on Tuesday reported a 3 per cent year-on-year (YoY) rise in its net profit at Rs 197 crore for December quarter of the financial year 2019-20 (Q3FY20). On sequential basis, numbers grew 45.9 per cent. In the previous quarter, the company had posted profit of Rs 135 crore while in the year-ago period, the numbers stood at Rs 191.2 crore.
Revenue for the period came in at Rs 1,965.3 crore, up 10 per cent YoY and 2.7 per cent QoQ. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 23.4 per cent QoQ and 8.1 per cent YoY to Rs 306.3 crore.
Diluted earnings per share (EPS) came in at Rs 11.96, up 3 per cent YoY and 45.9 per cent QoQ.
“As we continue to grow revenue, our sharp focus on driving profitable growth has resulted in expansion of operating margin by 2.6% and a rise in net profit by 44.7% as compared to previous quarter,” said Debashis Chatterjee, CEO & Managing Director, Mindtree. “We continue to execute our growth strategy, proactively incubate deals by mining strategic clients and nurture a learning-led culture. The recently concluded Annual Customer Experience Survey results depict industry-leading scores, indicating our exceptional work in delivering quality services to our clients,” Chatterjee added.
Among key highlights, Hi-Tech and Media grew 15.2 per cent YoY while BFSI grew 7.7 per cent YoY. Retail, CGP and Manufacturing grew 1 per cent YoY and Travel while Hospitality grew by 9.3 per cent YoY. The company’s Digital business grew by 13.5 per cent YoY and EBITDA margin improved by nearly 260bps as compared to last quarter.
In US dollar terms, revenue stood at $275.2 million, up 1.5 per cent QoQ and 9.4 per cent YoY. Net profit saw a growth of 44.7 per cent on QoQ basis at $27.7 million. On YoY basis, numbers grew 3.1 per cent.