HDFC Ltd Q1 FY2023 Results: Profit Rises 22% But Misses Estimates

HDFC Ltd Q1 FY2023 Results

HDFC Ltd reported its Q1FY23 earnings on Friday afternoon. The topline increased by 22% but was below street estimates. HDFC Ltd rallied 2.2% post the result announcement to close at Rs 2,389 per share.

HDFC Ltd Q1 FY2023 Results: Key Highlights

  • Net profit: Rs 3668.82 crore, up 22% YoY
  • NII: Rs 4,447 crore from Rs 4,125 crore in the year-ago period
  • AUM: Rs 6.71 lakh crore, up 17% YoY

Let us look at all the details of HDFC's June quarter results:

HDFC Q1 Results: Net Profit Increases

HDFC Ltd has reported a 22% year-on-year rise in net profit at Rs 3,668.82 for the June quarter, below street estimates. Analysts had earlier anticipated a net profit of about Rs 3,902 crore. The revenue increased on the back of healthy growth in assets under management (AUM) which helped net interest income to rise.

HDFC Ltd Q1 FY2023 Results: Net Interest Income Rises 

HDFC Ltd is the largest NBFC in India. Its primary business is to borrow money from different sources and at a rate higher. The income the NBFC generates from the difference between the two is known as net interest income. This is a critically important number that tells investors how much the company is earning from its core operations. HDFC's net interest income (NII) increased by 7.2% year-on-year to Rs 4,447 crore in Q1FY23 from Rs 4,125 crore in Q1FY22. It was below estimates of Rs 4,701 crore. The Net Interest Margin (NIM) was 3.4% in Q1FY23 compared with 3.5% in Q4FY22.

HDFC Ltd Q1 FY2023 Results: Strong loan growth 

HDFC’s assets under management (AUM) at the end of the June quarter stood at Rs 6.71 lakh crore, up 17% from the year-ago period. Individual loans comprise 79% of the total AUM at the end of the June quarter. The growth in the individual loan book was 19% (on an AUM basis). This is the highest percentage growth in the individual loan AUM reported by NBFC in 8 years. The average size of individual loans increased from Rs 33.1 lakh in FY22 to Rs 35.7 lakh in Q1FY23.

HDFC Ltd Q1 Results: Asset Quality

The gross individual NPAs stood at 0.98% of the individual portfolio as of June 30, compared to 1.91% in the previous quarter. The gross non-performing non-individual loans stood at 4.44% of the non-individual portfolio. The gross NPLs for the June quarter stood at Rs 10,288 crore. This is equivalent to 1.78% of the portfolio. 

Compared to the December 21 quarter, the NPL numbers have improved - the gross individual NPLs stood at 1.44% and the gross non-individual NPLs stood at 5.04% of the non-individual portfolio. 

HDFC Ltd Q1 FY2023 Results: Capital Adequacy Ratio (CAR) 

HDFC's CAR stood at 21.9%, of which Tier I capital was 21.4% and Tier II capital was 0.5%. As per regulatory norms, the minimum requirement for the CAR and Tier I capital is 15% and 10%, respectively.

Disbursements: It surged during the June quarter to Rs 42,000 crore. Individual loan disbursals grew by 66% year on year. The affordable housing loan segment showed a healthy growth of 10% for the June quarter, though lower than the 14% growth seen a year ago.

HDFC Ltd Q1 FY2023 Results: Analysts' Views

Out of 34 analysts, 19 have given a BUY call, 11 OUTPERFORM, and 4 have given a HOLD call on HDFC Ltd share price. The target price of HDFC Ltd is Rs 3,321 per share.

  • How was HDFC Ltd Q1FY23 result?

  • Has HDFC Ltd declared a dividend for Q1FY23?

  • When will HDFC Ltd merge with HDFC Bank?