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HDFC Bank Q4FY21 Results Analysis | Yadnya Investment Academy

HDFC Bank Q4FY21 Results Analysis | Yadnya Investment Academy

Published on 19 April 2021

HDFC Bank has announced its quarterly results for Q4FY21 on 17th April 2021. Hence, in this blog, we will be analyzing the quarterly results of HDFC Bank.

Introduction:

One of the leading private banks in India, HDFC Bank has released its Q4FY21 results on Saturday 17th April 2021. Bank has posted a decent result with growth figures across the parameters.

Q4FY21- Standalone Results:

Profit & Loss Account:

  • Bank has recorded an increase in net revenue by 16.4% YoY to Rs. 24,714.1 Cr. Net Revenue of the bank in Q4FY20 was Rs. 21,236.6 Cr.
  • Net Interest Income of the bank has grown by 12.6% YoY from Rs. 15,204.1 Cr. in Q4FY20 to Rs. 17,120.2 Cr. in the quarter ended 31st March 2021.
  • YoY Growth in Net Revenue and Net Interest Income of the bank of 16.4% and 12.6% depicts that Other Income of the bank has increased.
  • HDFC Bank Advances has grown by 14% in Q4FY21 and is having a Net Interest Margin of 4.2% which is quite a healthy figure.
  • Also, Bank has maintained the Liquidity Coverage Ratio of 138%, quite well above the regulatory requirement to continue its focus on deposits.
  • Other Income or Net Interest Revenue of the bank accounts to 30.7% of net revenues and stands at Rs. 7,593.9 Cr. in Q4FY21. While the same has grown by 25.9% from Rs. 6,032.6 Cr. in the Q3FY21.
  • Growth in Non-Interest Revenue presents the situation of incoming normalcy in the business. Fees, Foreign Exchange & Derivative Revenue, Gain on Sale/Revaluation of Investments, and other miscellaneous income are the sources of Other Income for the bank.
  • HDFC Bank has also reported an increase in Operating Expenses of 10.9% YoY from Rs. 8,227.8 Cr. in the Q4FY20 to Rs, 9,181.3 Cr. in Q4FY21. The rise in Revenue of the bank is more than its operating expenses and thus shows its increase in operational efficiency.
  • Further, the Cost-to-Income Ratio of the bank has reduced from 39% in Q4FY20 to 37.2% in Q4FY21 which shows improvement in margins of the bank as well.
  • Another positive sign for the bank is its pre-provision Operating Profit (PPOP) has grown by 19.9% on yearly basis and is at Rs. 15,532.8 Cr.
  • Currently, the worrisome situation for the bank is the situation of Gross NPA, as Honorable Supreme Court has declared to declare NPA and to do provisioning accordingly.
  • For this, HDFC Bank is having provision and contingencies of Rs. 4,693.7 Cr. in Q4FY21 which was Rs. 3,874.5 Cr. in Q4FY20.
  • Bank has reported an increase in the Credit Cost Ratio of 0.49% YoY from 1.25% om Q4FY20 to 1.64% in this quarter.
  • Profit Before Tax (PBT) of the bank stands at Rs. 10,839 .1 Cr. in Q4FY21 with a growth of 18.1% from PBT of Q4FY20.
  • Net Profit of the bank is also up by 18.2% YoY which stands at Rs. 8,186.5 Cr. as of March 31, 2021.

Balance Sheet:

  • HDFC Bank is having a total Balance Sheet size of Rs. 17,46,871 Cr. as of March 31, 2021. It has grown by 14.1% from Rs. 15,30,511 Cr. as of March 31, 2020.
  • The deposit Book of HDFC Bank stands at Rs. 13.35 Lakh Cr. as of 31st March 2021. The YoY growth rate of the Deposit book is 16.3%. The deposit book has grown from Rs. 11.47 Lakh Cr. in Q4FY20 to Rs. 13.35 Lakh Cr. in Q4FY21.
  • CASA Deposit of the HDFC bank has grown by 27% YoY from Rs. 4.8 Lakh Cr. in Q4FY20 to Rs. 6.15 Lakh Cr. in Q4FY21.
  • HDFC Bank is having a loan book of Rs. 11.32 Lakh Cr. as of 31st March 2021, the loan book of the bank has grown by 14% YoY in the same quarter of the previous year.

Profit and Loss Account- FY21:

  • Total Income earned by the bank in FY21 is Rs. 1.46 Lakh Cr. Total Income for the bank in the last fiscal year was Rs. 1.38 Lakh Cr.
  • Despite its big size, Bank has been able to keep the Net Interest Margin of 4.2% in FY21.

Capital Adequacy:

  • The capital Adequacy Ratio of the Bank is at 18.8% as of March 31, 2021, against the Capital Adequacy Ratio of 18.5% in Q4FY20.
  • It is expected that Bank may raise funds in the coming period which will certainly push the Capital Adequacy Ratio as well.

Network:

  • HDFC Bank has opened fresh 354 branches in FY21 and has taken the total number of branches of 5264 in FY20 to 5608 as per the quarter ended 31 March 2021.

Asset Quality:

  • Gross NPA is at 1.32% as of March 31, 2021, as against 1.38% and 1.26% in Q3FY21 and Q4FY20 respectively.
  • Net NPA of the Bank is 0.4% of the total advances as of March 31, 2021.

Conclusion:

HDFC Bank had posted an impressive result with an increase in Net Profit of 18.2% YoY. Also, the Net Revenue of the bank has gone up by 16.4% in the last quarter of FY21. NPA situation of the leading private-sector bank also looks under control and no other major issues could be reported this week.

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