We are anticipating great demand and are positive going forward: Aditya Puri, HDFC Bank
Overall environment is becoming favourable and we will see a change in demand sentiment.
You have launched the HDFC Festive Treats. What is your outlook for demand this festive season especially with e-commerce sales?
The demand has been fantastic. The first product we started with was Apple Phone. It sold out in four hours. You would not believe the amount of inquiries we are getting. You must recognise ki yeh theek hai (things are alright). 1% here and there GDP toh hoyega par logo ko jeena hai na! Toh agar main aap ko 69,000 ka phone 39,000 mein de raha hu, 60,000 ka TV 40,000 mein de raha hu toh logo ke bachchon ki shadi hoyegi, koi ghar move karega (GDP will be 1% less or more but if people get a Rs 69,000 phone for Rs 39,000 and Rs 60,000 TV for Rs 40,000, there will be demand. Somebody will get married, someone will move jobs).
Aur koi itni job loss hui nahi (I don’t think there were that many jobs lost). So, we are anticipating a great demand. We are also positive going forward. We do not expect a quick turnaround but we think you will start to see the effects by the first quarter of the calendar year.
So when you say do not expect a quick turnaround, are we talking about the reforms that have been announced by the finance minister and are you saying that we can expect a turnaround in a few months?
Yes, not only the reforms, it is overall what the government is saying they are going to do for agriculture; they are divesting; they are putting money in. We had a good monsoon. They have got enough money coming in. They are looking at sovereign bonds. Overall, the environment is becoming favourable and we will see a change in the demand sentiment.
Talking about HDFC Bank specifically, where do you see growth coming in?
All our segments are doing better. Our retail loans in September were more than August and October will be better than September. We expect growth to keep coming along. Our semi-urban and rural areas, where we have spent a lot of money and taken all our products, we are the only bank on the asset side showing phenomenal results.
We are doing 10,000 melas, including gramin melas. Our lending to the small businesses has picked up. Our business banking has picked up, parts of working capital demand have picked up, corporate has picked. So we are seeing a very good demand.
What are you picking as far as the NBFC sector is concerned? Are you seeing some kind of improvement or are you still seeing risk aversiveness towards this sector?
No the NBFC sector it has problems, those are being worked out but the crisis is over. Some NBFCs will have trouble but I do not think it will affect the growth prospects of the country or some major surprises are in place. Small amounts do not make a difference.
Over the last few days, we have also seen asset quality go down a little bit. What is your outlook towards that….
Ye kon se asset quality hai (Which asset quality are you talking about)?
We have seen PMC also picked out by the RBI. Basically, what we understand is that the asset quality is going down for a lot of banks?
Bank ka toh main nahi bata sakta, PMC ka mere ko maloom nahi. Woh Reserve Bank se puche (I can’t say about other banks. As for PMC, ask RBI). Our asset quality is pristine. We are seeing no strain in our portfolio. We have not had to take credit risk. We have also seen a saturation where our margins are intact. There is no direction from RBI in any way telling you how to price. They are just talking about transparent benchmark.
We are expecting another rate cut in the next RBI policy. Will it be another 35 bps like we saw last time?
Market is expecting between 25 and 40 bps cut.
Is that what you are expecting?
I am part of the market.
You said Flipkart or Amazon ki toh chaar din ke sale hai, HDFC mein 3 mahine ki sales hai (Flipkart and Amazon have three days’ sale. HDFC has three-month sale). So, what can the customers expect? You have spoken about iPhone…
Everything. We have tied up with 1,000 companies. It has been a hell of an effort. Whether it is household goods, whether it is interest-free consumer durables, whether it is motorcycles, cars, refrigerators or TVs, you name it and just go out look at it, thoda haso, Diwali aai hai (smile a bit, it’s Diwali). You won’t believe the prices and the country will turn around.