HDFC Bank Posts Robust March Quarter And FY12 Numbers

One of the heavyweights in the private banking space, HDFC Bank has come out with the March 2012 quarter and FY12 results yesterday. The results were in line with the street expectations as the bank showed robust performance for the quarter. For the March quarter its net profit increased by 30 per cent to Rs 1,453 crore while for the full year of FY12 its profit jumped by 31.60 per cent to Rs 5,167 crore. The bank has continued with its last seven-year trend of growing the bottomline by more than 30 per cent on a YoY basis. Yesterday the scrip closed higher by 1.13 per cent and today it is trading at its 52-week high, up by 1.47 per cent to Rs 544.80. 

Most of the parameters of the bank remained almost stable which shows that the bank can easily pass through any difficult environment. In the past couple of quarters when most of the banks faced headwinds in terms of deterioration in asset quality and maintenance of net interest margin (NIM) etc, HDFC Bank has come out as a clear winner by overcoming the above concerns.

Even in the rising interest rate regime its net interest margin for March 2012 remained stable at 4.2 per cent, which is very commendable. When most of the banks are facing pressure on their asset quality front, the scenario is different for HDFC Bank. Its net NPAs remained constant at 0.2 per cent to the total advances. Further, the bank’s provision coverage ratio declined marginally by 10 basis points to 82.4 per cent on a YoY basis. The capital adequacy ratio (CAR) of the bank increased by 30 basis points to 16.5 per cent and the Tier 1 CAR stood at 11.6 per cent. This puts the bank in a very comfortable zone.

As on March 31, 2012, the total advances of the bank increased by 22.2 per cent to Rs 1,95,420 crore while the total deposits increased by 18.3 per cent to Rs 2,46,706 crore on a YoY basis. Both advances and deposits of the bank grew above the RBI’s projections of 15.5 and 16 per cent for FY12. The CASA ratio decreased by 260 basis points to 48.4 per cent of the total deposits. The revenue from the treasury segment increased by 30 per cent to Rs 2,115 crore. On the other hand, the highest contribution to the bottomline was done by the corporate segment which increased by 81 per cent to Rs 951 crore. 

Also, for the full year of 2011-2012 the bank posted robust performance. Its net interest income increased by 16.63 per cent to Rs 27,286 crore while the PAT increased by 31 per cent to Rs 5,167 crore. Provisions during the year decreased by 25 per cent to Rs 1,437 crore, thus helping the bank to post a healthy bottomline.

The RBI’s recent move of cutting the interest rate by 50 basis points will definitely boost the banking space. Being one of the leading banks in India, HDFC Bank will have good growth opportunities going ahead. With the interest rate taking a U-turn coupled with strong financial performance, HDFC Bank is one of the scrips which should definitely be in an investor’s portfolio.