HDFC shares jump up after 20 percent reported profit in December quarter

Shares of HDFC Bank increased nearly 1 percent after the private sector lender reported a 20 percent rise in net profit for the December 2018 quarter. Its shares gained 0.72 percent to close at Rs 2,146.55 apiece on the BSE. During the day, it touched a high of Rs 2,165, up 1.58 percent from the previous close. Following the uptrend, the stock settled at Rs 2,145.40, a gain of 0.71 percent, on the National Stock Exchange (NSE). It was trading at an intra-day high of Rs 2,166.50, 1.70 percent higher from the previous close. In terms of equity volume, 1.80 lakh shares were traded on the BSE, while over 43 lakh scrips of the bank changed hands on the NSE during the day.

The private sector lender Saturday reported a 20.3 percent growth in net profit to Rs 5,585.9 crore for the third quarter ended December 31, mainly on account of higher net interest income (NII). The bank had posted a net profit of Rs 4,642.6 crore in the October-December quarter of 2017-18.

Total income of the lender rose to Rs 30,811.27 crore during the quarter, against Rs 24,450.44 crore in the year-ago period. "In the December quarter 2018-19, HDFC Bank's operating profit was in line with our expectations, while bottomline was below our expectations by 5 percent on account of higher provisions," Elara Capital said in a research note, adding that the company's asset quality continues to remain robust except for some concerns in agri portfolio.

NII, which is interest earned minus interest expended, grew 21.9 percent to Rs 12,576.8 crore, compared with Rs 10,314.3 crore a year ago, driven by asset growth of 23.7 percent and a core net interest margin of 4.3 percent for the quarter, it said. During the quarter, the bank's gross non-performing assets (NPAs) rose to 1.38 percent of the total advances, compared with 1.29 percent at the end of the third quarter of 2017-18. Net NPAs of the bank declined to 0.42 percent of the assets in October-December 2018, against 0.44 percent a year ago.