HDFC Bank’s Q3 results reveal modest growth, asset quality concerns

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By Robert Fofana

HDFC Bank’s Q3 results reveal modest growth, asset quality concerns
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HDFC Bank reported a 51% year-on-year (YoY) net profit surge to Rs 16,811 crore in its Q2 results. The substantial jump was supported by robust net interest income and reduced provisions. However, the bank’s asset quality showed signs of deterioration, casting a shadow over the otherwise strong performance.

Deepak Shenoy, a market analyst, pointed out that these numbers do not take into account the impact of the HDFC Ltd merger from the previous year. If one factors out the associate profit from last year’s combined earnings of HDFC entities, Shenoy’s recalculated figures suggest a more modest 10% YoY increase instead.

The recalculated figures offer a different perspective on HDFC Bank’s performance, highlighting the influence of the previous year’s merger on the bank’s seemingly robust growth. It also underscores potential challenges that may arise from the decline in asset quality.

While the bank’s net profit has shown significant growth, it is important for investors and market watchers to consider these factors when assessing HDFC Bank’s overall health and future prospects.

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