India Bank Earnings: HDFC Bank Q2 2013 jumps 30% on year

HDFC Bank Net Income jumped INR 420 crores to INR 1982 crores after a bigger jump to 1560 crores in the year ago September quarter, NII was a healthy INR 44.73 Bln, provisions reducing to less than 4 Bln down 20% and Gross NPAs seemingly under control at 1.1%

CAR is down at 14.6% hopefully as the bank put more capital to lending from a linked quarter low of 15.5%. The NII is a 1% higher over June 2013 to INR 44.7 Bln and the NIMs have stayed at 4.3% over the 4.6% score in June 2013.

Nothing else would have changed in the bank strategy implying a steady 20% plus growth in credit but for the economy scraping the roads on its last legs(wheels) and HDFC Bank gets under the flak /slag button the bank earnings game show (much deserved for skewing and shilling the India growth equation)

They had improved growth in the retail book by 25% in the June quarter  and 15% in the corporate book. The Corp book has very recently returned into growth again after MSF rates were cut and TCS posted a cycling 23% growth in quarterly arnings after a bad Q2, i’ll let you decide if that is worth taking banks out of the Page 1 as we scrape legacy for 5% of the Global outsourcing market in TCS and Cognisant.(and Infosys)

Consumption data aside, rural inflation is still under 10% and though one can imagine the editorial changing perhaps claiming to a new generation ( that appears for CAT within a month), ducking HDFC Bank ‘s sterling results under the TCS performance was probably more than just a journalistic travesty. HDFC Bank performance was a good showing esp as Derivatives volumes has clipped up to INR 5 Bln in volumes and securitisaion though much maligned can relaly spread liqudity around. The Bank showcased a  bottom of the  cycle 16% retail in growth even as NBFCs like Bajaj Finserv and Bajaj Finance jumped lending and bottomlines like any other growth quarter , ensuring the success of festive season this month and next with the big Deepavali celebrations and then the roll into Christmas and New Year with school holidays.

HDFC Bank may have lost cosmopolitan markets but has not lost its magic and keeps the 30% bottomline growth faith within a reasonable band because of its power of distribution keeping the primacy of retail in the bank at 53% share even as Corporate and Institutional Bank steps up to the plate. Going further into the 20s it would not hurt the bank to get an existence outside ‘branch banking’

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