HDFC Bank Limited

The transcript did not include the quarter’s headline revenue, EPS, or net profit figures. Management did say reported profit growth was 5% year over year, but after adjusting for one-timers it was 9.8%. Margin was described as around 3.4%, cost of funds were about 40 basis points lower year over year and roughly flat sequentially, and the loan book was discussed as having a 52% retail mix. On growth, management cited corporate/wholesale advances at about 18%, business banking within MSME at 22.3%, mortgages disbursements up about 14%, and disbursements in unsecured and wheels businesses up around 20% plus. For deposits, the bank said overall borrowing mix was about 11%, the overall coverage ratio was 66%, and FCNR mobilization is expected to gain traction in July through September, though no target number was given. On ECL, management said they do not expect a material transition impact and that any ongoing credit cost impact should be limited, with existing reserves and contingencies viewed as adequate.

Sashi Jagdishan struck an optimistic but disciplined tone, saying the bank had navigated a “very tough period” and is now entering a more stable phase with the new chairman in place. He emphasized that deposit growth, branch productivity, advances, and customer service are all improving, and that the bank is preparing to “press the pedal” on growth. He also framed technology, AI, and faster turnaround times as central to the next phase of franchise expansion.

Srinivasan Vaidyanathan focused on funding costs, mix, and reserve adequacy. He said there is still potential for 40 to 50 basis points of improvement in cost of funds over time, but not quickly, and that borrowing mix is still about 11%. He also noted the bank’s overall coverage ratio is 66% versus 71% in 2019, with the difference largely due to a higher agriculture book share, and said ECL adoption on 1 April 2027 should not create a material shock because current provisioning is already broadly adequate. He added that the bank has roughly INR 40,000 crore to INR 50,000 crore of borrowings maturing over the next couple of years, with refinancing into deposits potentially saving more than 100 basis points.

Analysts focused on whether margins had bottomed, how FCNR mobilization would help, and when leadership appointments would be finalized. Management said margins should benefit over time from lower funding costs, better asset mix, and improved deposit mix, but they would not guide to a near-term bottom. On FCNR, they declined to give a target size but said July through September should show meaningful traction and that the bank aims to be a significant share of the system, similar to 2014-15. On governance, they said the board is seized of the CEO/MD reappointment and related director appointments, and announcements will follow once the process concludes.