HDFC Bank has once again reported stellar performance for the first quarter ended June 2002. Fueled by its strong focus on retail banking, the bank's interest income grew by 23% and profits jumped by 33%, YoY. The bank also managed to improve its operating margins through cost control and lower interest cost.
Income from operations
Net interest income
Operating Profit Margin (%)
Provisions and contingencies
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (m)
Diluted Earnings per share*
During the quarter, the bank focused on balance sheet consolidation and on increasing the proportion of retail loans in overall asset growth. Its total deposits also grew by over 33% YoY to Rs 176 bn as on June 30, 2002. Low cost funds accounted for 41% of total deposits raised by the bank as on March 2002. The bank's relatively higher access to savings and current account funds has enabled it to bring down its average cost of funds (6.3% as on March 2002).
Despite its ongoing network expansion, HDFC Bank managed to maintain its cost to income ratio at 45%, which is in line with its private sector peers. This coupled with the bank's higher fee based income fueled its bottomline growth. Taking advantage of higher operating profits, the bank increased its NPA provisions in the June quarter. Its net NPAs to advances ratio at 0.5% with NPA coverage of 85% is the best in the industry, reflecting the bank's asset quality.
Interest on advances
Income on investments
Interest on balance with RBI
At the current market price of Rs 210 HDFC Bank is trading at a P/E of 18x 1QFY03 annualised earnings and Price/Book value ratio of 3x. The bank's valuations are one of the highest in the sector due to its ability to maintain strong profit growth and superior asset quality. Its capital adequacy ratio at 15% would support its future business expansion. However, increasing competition from both foreign and other private sector banks could trim HDFC Bank's earnings growth and consequently its valuations.
HDFC Bank declared the results for the third quarter of financial year ending March 2017 (3QFY17). The bank has reported 18% YoY and 15% YoY growth in net interest income and net profits respectively in 3QFY17.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407