HDFC Bank Q1 FY27 Results (NSE: HDFCBANK)
Signal: Earnings grew
The read
Consolidated net profit rose 18% YoY driven by a 75% drop in provisions, masking a 14% decline in operating profit. Asset quality improved with GNPA at 1.17% (vs 1.49% a year ago). Revenue growth was flat, and cost-to-income ratio worsened, indicating underlying operational pressure.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,33,110.36 Cr | 0.04% | 13.8% |
| EBIT | ₹30,996 Cr | -14.3% | |
| Net profit | ₹19,244.71 Cr | 18.4% | |
| EPS | ₹12.5 | 17.8% | |
| EBIT margin | 23.29% |
P&L walk
Revenue flat, but net profit up 18% as provisions collapsed 75% from ₹15,314 Cr to ₹3,803 Cr; operating profit before provisions fell 14% due to higher operating expenses and lower other income.
Segments
Insurance business segment profit of ₹1,750 Cr supported overall group profit, while Treasury segment profit declined sharply from ₹10,598 Cr to ₹2,407 Cr due to lower other income. Retail Banking and Wholesale Banking segments showed strong profit growth (up 3x and 2.8x YoY respectively) partly due to lower provisions allocated to those segments.
Key positives
- Asset quality improved: GNPA ratio down to 1.17% from 1.49% (YoY), NNPA at 0.41%.
- Net profit grew 18% YoY to ₹19,245 Cr (after minority) driven by lower provisions.
- Deposits and advances grew 15% and 16% YoY respectively, indicating strong business momentum.
Key concerns
- Operating profit before provisions declined 14% YoY on flat revenue, signaling margin pressure.
- Cost-to-income ratio increased to 40.9% from 37.0% a year ago, driven by higher employee and insurance claims costs.
- Other income (excluding insurance) fell sharply, impacting treasury segment profitability.
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