Despite slower loan growth, HDFC Bank reported a 2.2% increase in its consolidated net profit for the October–December quarter, reaching ₹17,657 crore.
HDFC Bank Q3 Results Highlights:
On Wednesday, January 22, HDFC Bank released its October-December quarter results for fiscal 2024-25 (Q3FY25), showing a 2.2% increase in its standalone net profit to ₹16,735.50 crore, up from ₹16,372 crore during the same period the previous year.
The difference between interest earned and paid, known as net interest income (NII), increased by 8% to ₹76,006.8 crore in the third quarter of the current fiscal year from ₹70,582.61 crore in the same time last year. The sluggish loan growth in Q3FY25 limited the earnings of India’s biggest private-sector bank.
In addition to core revenue, HDFC Bank’s overall costs for the October to December quarter increased 7.55 percent year over year (YoY) to ₹62,460.04 crore from ₹58,072.35 crore the previous year. The December quarter saw a slight decline in HDFC Bank’s asset quality.
From ₹31,011.67 crore in Q3FY4 to ₹36,018.58 crore for the quarter, the gross non-performing assets (NPA) increased 16.15% yearly. Compared to the same quarter of the previous fiscal year, the ratio of gross non-performing assets to gross loans increased to 1.42 percent from 1.26 percent.
Compared to ₹7,664.10 crore in the same quarter previous year, the net non-performing assets (NPAs) or bad loans increased by 51.2% year over year to ₹11,587.54 crore in the December quarter. The net advances that were non-performing assets (NPAs) rose from 0.31 percent to 0.46 percent annually.
According to HDFC Bank, average CASA (Current Account and Savings Account) deposits increased 6% YoY to ₹81,7600 crore in Q3FY25, while average deposits increased by approximately 16% YoY to ₹24,52,800 crore.
According to HDFC Bank, the core net interest margin (NIM) was 3.43% on total assets and 3.62% on interest-earning assets. In the December quarter, operational expenditures climbed 7.2% year over year to ₹17,110 crore from ₹15,960 crore during the same time the previous year.
Following its 2023 merger with parent company HDFC, HDFC Bank was forced to restrict loan growth or accelerate deposit growth because it had a much lower quantity of deposits and a larger pool of loans. According to reports, HDFC has been reducing the amount of retail loans it offers to boost its credit-deposit ratio, which skyrocketed following the merger.
The asset management division made ₹640 crore, HDB Financial Services ₹470 crore, HDFC Life Insurance ₹410 crore, and securities ₹270 crore. HDFC Bank’s stock ended Wednesday’s trading session on the BSE 1.42 percent higher at ₹1,665.05 per share. Over the past 12 months, HDFC Bank shares have returned around 15%. However, year-to-date (YTD), in 2025, the banking stock has fallen more than 7%.
According to D-Street analysts, HDFC Bank Ltd. produced consistent Q3FY25 results, with net profit meeting market expectations. Management laid out a plan to get the LDR back to pre-COVID levels in its Q2FY25 comments, which focused on deposit accumulation and resulted in slower credit growth than industry norms. This approach is seen in Q3FY25’s performance.
Despite modest loan expansion, consistent deposit growth aligns with the bank’s long-term objectives. According to Abhishek Pandya, Research Analyst at StoxBox, HDFC Bank has maintained sound asset quality through risk-calibrated lending and careful underwriting despite a minor fall in asset quality.
The expert claimed that CASA accretion issues put pressure on NIMs. Return ratios should be improved in the upcoming years by cutting back on expensive borrowings and increasing operational effectiveness. Along with the bank’s strategic reaction to the RBI’s draft circular on lending overlap among group businesses, asset quality, and credit growth will be top goals. Despite shifting macroeconomic conditions, HDFC Bank’s Q3FY25 results show a balanced performance overall,” Pandya continued.
Technical View:
The share price of HDFC Bank is now between ₹1,610 and ₹1,730 per share. Market analysts thus urge investors holding HDFC Bank shares to keep a tight stop loss of around ₹1,610 and wait for the next breakout at ₹1,730 on a closing basis. HDFC Bank owners can increase their trailing stop loss to ₹1,670 whenever the stock decisively breaks over ₹1,730.
For the short-term goal of ₹1,800 per share, fresh Purchasing is only recommended above ₹1,730. However, new purchasers must have a tight stop loss at ₹1,670 following the breakthrough at ₹1,730, according to Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi.
