HDFC Bank Q2 net up 20% at Rs 2,869 crore, meets estimates

Gross NPA at 0.91% compared to 0.95% q-o-q; NIM at 4.2%

Gross non-performing loans as a percentage of total loans fell to 0.91% from 0.95% in the June quarter. Net NPA was down to 0.25% compared to 0.27% in the immediate previous quarter.

Cuts in minimum lending rates to pass on policy rate reductions by the central bank weighed on net interest margin that fell to 4.2% in the September quarter from 4.3% in the previous three months.

HDFC Bank will likely recoup some of the lost margins in the coming quarters, said Vaibhav Agrawal, a sector analyst at Mumbai's Angel Broking. Agrawal, who considers the lender among his preferred stock picks, described its asset quality as "rock solid".

Net interest income for the quarter grew 21.2% to Rs 6,681 crore as loans grew about 28% - much faster than the industry. Non-interest revenue including fees and commissions grew a faster 24.7%.

The bank's stock was 0.24% lower at Rs 1,092.50 on the BSE at 12:58 pm.

The stock has gained more than 6% since the start of September and is up nearly 15% this year during which it has outperformed the NSE bank index and the broader Nifty.