In its first financial report since merging with Housing Development Finance Corporation (HDFC) Ltd, HDFC Bank announced on Monday significant profit growth. The top Indian private sector lender reported a consolidated net profit of ₹ 16,811 crore and a standalone net profit of ₹ 15,976 crore, marking a substantial increase from last year's figures of ₹ 11,162 crore and ₹ 10,606 crore respectively.
The bank's total income also saw a considerable boost, escalating by 70% year-on-year to ₹ 78,406 crore. This surpasses an ET Now poll prediction of ₹ 14,800 crore. Moreover, the net interest income - the difference between interest earned and spent - rose over 30% year-on-year to ₹ 27,385 crore. Although this figure fell slightly short of the projected ₹ 28,500 crore. According to InvestingPro data, HDFC Bank's revenue growth was an impressive 77.37% for the last twelve months until Q2 2023.
Despite the positive financial results, the bank's net interest margin narrowed slightly to 3.4%. This contraction is attributed to the debt-funded cost for additional liquidity and merger management expenses. There was also a minor increase in the gross non-performing assets ratio from 1.23% to 1.34%.
InvestingPro Tips shed light on HDFC Bank's financial standing, emphasizing that the bank has seen accelerating revenue growth and consistently increasing earnings per share. It's also worth noting that HDFC Bank has raised its dividend for 3 consecutive years, a testament to its financial stability. This aligns with InvestingPro's data, showing a hefty dividend growth of 1054.33% for the last twelve months until Q2 2023.
On the market front, HDFC Bank's share price experienced a slight dip of 0.47% on the Bombay Stock Exchange (BSE), closing at ₹ 1,529.50 on Monday. In terms of market capitalization, HDFC Bank stands at 472.84M USD, as per InvestingPro data. The bank's P/E ratio, a key indicator of a company's valuation, is at a low of 3.11, suggesting that HDFC Bank's shares could be undervalued.
For those interested in more insights like these, InvestingPro offers a range of additional tips and real-time metrics. With a total of 13 tips available for HDFC Bank, the platform provides comprehensive data for informed investment decision-making.
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