hdfc bank adr drops today: HDFC Bank ADRs drop over 2% post Q3 results. Is the scorecard bad?

MUMBAI – The American Depository Receipts (ADRs) of HDFC Bank dropped more than 2% in trade on the New York Stock Exchange on Tuesday after the lender released its numbers for the quarter ended December. The ADRs were down 2.6% at $63.89 on the NYSE.

The fall in the ADRs was following a weak start for stocks on Wall Street. US benchmark indices fell 0.3-0.5%.

Back home, shares of India’s largest private sector lender ended 0.4% up on the National Stock Exchange at Rs 1,679.15.

The private sector lender reported a 34% year-on-year (YoY) growth in net profit for the December quarter to Rs 16,372.54 crore. The bottom line was higher than an ETNow poll of Rs 15,846 crore.

Net interest income, the difference between interest earned and interest expended, rose 24% YoY to Rs 28,471.34 crore. However, this trailed estimates of Rs 29,067 crore.

Sequentially, the profit rose 2.5%, and net interest income grew by nearly 4%. The profit number would have been high if not for the higher provisions. Provisions in the quarter increased to Rs 4,217 crore from Rs 2,806 crore a year ago, and Rs 2,904 crore a quarter ago.

On the asset quality front, while the gross non-performing assets ratio rose to 1.26% from 1.23% a year ago, the net NPAs came down marginally to 0.31% from 0.33% a year ago. Further, operating expenses rose to Rs 15,961 crore from Rs 12,464 crore a year ago. The cost-to-income ratio for the quarter was at 40.3%.

On the capital front, the lender was comfortably placed, with the capital adequacy ratio at 18.4% as of December-end, much higher than the regulatory requirement of 11.7%.

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