HDFC Bank shares gain ahead of Q3; what to expect

Shares of HDFC Bank were trading in green ahead of its third quarter result for December 31, 2016. At 10.02 am, stock price of HDFC Bank was at Rs 1253.85 per share on BSE Sensex, up Rs 9.05 or 0.73%.

Analysts at Systematix Research expect HDFC Bank to report Net Interest Income (NII) at Rs 5,339.1 crore, down by 2.1% on year-on-year (yoy) basis, while profit after tax (PAT) is expected to be at Rs 2,228.5 crore declining by 26.2% yoy.

A Motilal Oswal report said it expects HDFC Bank to report NII of Rs 8,015.7 crore up by 13.4% yoy and PAT at Rs 3,901.9 crore rising by 16.2% yoy.

Kotak Institutional Securities said, “It expects banks with established retail loan machinery like Axis Bank, HDFC Bank, ICICI Bank and SBI to be better positioned to tide over the impact of demonetization.”

Kotak also feels RBI's asset quality review to offset the impact of stressed assets and enable most banks to see higher growth in net profits compared to pre-provisioning profits.

In Q2FY17, HDFC Bank's net profit rose 20.42% as compared to Rs 2,869.45 crore in the corresponding period of the previous year. 

For the banking sector, analysts believe that credit growth, weak net interest income (NII), slippages and fee income will weigh heavy on the sector.