HDFC Bank shares tumble 3% after Q1 earnings

Shares of HDFC Bank dipped over three per cent on Monday as the company's June quarter earnings failed to enthuse investors.

The stock went lower by 3 per cent sto Rs 1,475 on the BSE. At the NSE, it dipped 3.17 per cent to Rs 1,474. HDFC Bank's consolidated net profit for the June quarter increased 14 per cent to Rs 7,922 crore, but the largest private sector lender reported reverses because of the second wave of the pandemic which compressed its growth. When compared with the preceding March quarter's Rs 8,434 crore, there was a decline in the consolidated profit. On a standalone basis, the bank reported a post-tax profit of Rs 7,730 crore as against Rs 6,659 crore in the year-ago period and Rs 8,187 crore in the January-March period. Its core net interest income grew 8.57 per cent to Rs 17,009 crore on advances growth of 14.4 per cent and the net interest margin coming at 4.1 per cent, while the other income grew 54.3 per cent to Rs 4,075 crore. It can be noted that the year-ago quarter had a deep impact of the national lockdown and the ensuing impact in economic activity, whereas the reporting quarter had an impact due to localised lockdowns. "These disruptions led to a decrease in retail loan originations, sale of third party products, card spends and efficiency in collection efforts.