HDFC Bank’s ADR (US-listed shares of HDFC Bank Ltd.) has seen a big decline for the second consecutive day. On Wednesday, HDFC Bank’s US NYSE listed shares fell by more than 9%. This decline in shares is being seen after the third quarter results of the bank.
Biggest decline since April 2020
On Wednesday, HDFC Bank’s ADR slipped 9.38% to $55.44, which is the biggest fall since April 3, 2020. Before this, on Tuesday also a fall of up to 7% was seen in the stock.
On Wednesday, there was a fall of about 9% in the shares of HDFC Bank, which put pressure on the Indian markets and investors lost Rs 92,984 crore, which is the highest since March 23, 2020.
How were HDFC Bank’s Q3 results?
HDFC Bank’s December quarter profit has increased by 2.5% on a quarterly basis. Between October-December, the bank’s profit has increased from Rs 15,976 crore to Rs 16,373 crore. Whereas in Bloomberg’s analyst poll, the bank was estimated to have a profit of Rs 15,763 crore in this quarter. It is worth noting that the bank has received tax back of Rs 1500 crore from the Income Tax Department.
The bank’s interest income also saw a slight increase in this quarter. However, the growth in the company’s NII has been less than market expectations. HDFC Bank’s NII has increased from Rs 27,385 crore to Rs 28,471 crore in the December quarter.
Let us tell you that due to the merger of HDFC Bank with HDFC, these figures cannot be compared on an annual basis.
HDFC Bank Q3 Results (QoQ)
- Profit increased from Rs 15,976 crore to Rs 16,373 crore
- NII increased from Rs 27,385 crore to Rs 28,471 crore
- Gross NPA reduced from 1.34% to 1.26%
- Net NPA reduced from 0.35% to 0.31%
What went wrong in the last Q3 results
- HDFC Bank’s Net Interest Income (NII) did not increase at the pace with which the market expected it. The market expected that NII would see a growth of 8%, but it remained only 4%.
- Deposit growth of HDFC Bank was also not strong.
- HDFC Bank’s profits remained under pressure due to higher than expected increase in provisioning in the third quarter. Provisioning increased to Rs 4,216.6 crore, which is 50% increase quarter on quarter.
- On the deposit front, the bank added about Rs 41,000 crore, which was less than the guidance, and this is also quite worrying due to the slow pace of branch expansion of the bank.