HDFC Bank, India’s largest private sector lender, reported a 2.2% year-on-year rise in net profit for the third quarter of FY25, reaching ₹16,736 crore. The bank’s net interest income (NII) grew by 8.1% YoY. However, its asset quality showed slight deterioration, with Gross Non-Performing Assets (NPAs) increasing during the December quarter.
Abhishek Pandya, Research Analyst at StoxBox, commented that HDFC Bank’s performance was steady and met market expectations. The bank’s strategy to focus on deposit accumulation over credit growth, as outlined in previous quarters, was evident. Despite a slight decline in asset quality, the bank maintained a strong position through disciplined underwriting and risk-calibrated lending.
HDFC Bank’s gross advances during the quarter increased by 3% YoY to ₹25,42,600 crore. Retail loans grew by 10%, while commercial and rural banking loans increased by 11.6%. Corporate and other wholesale loans, however, declined by 10.4%.
HDFC’s Q3 FY25 profit growth
The average deposits grew nearly 16% YoY to ₹24,52,800 crore, and the average CASA (Current Account and Savings Account) deposits grew by 6% YoY to ₹8,176 crore. Following the results announcement, HDFC Bank’s share price saw an uptick.
Shares settled 1.42% higher at ₹1,665.05 on the BSE by the end of trading on Wednesday. The merger with Housing Development Finance Corp in 2023 added a significant pool of loans but fewer deposits to HDFC Bank’s portfolio, creating pressure to raise more deposits or slow down loan growth. Despite this, the bank continued to reduce its loan-to-deposit ratio by offering retail loans for sale.
As of December 31, 2024, HDFC Bank’s distribution network included 9,143 branches and 21,049 ATMs across 4,101 cities/towns. The number of employees increased to 2,10,219 from 2,08,066 in the previous year. Experts advise monitoring the HDFC Bank stock for a potential breakout above ₹1,730.
Investors holding the shares are recommended to maintain a strict stop loss. In conclusion, despite facing challenges, HDFC Bank has demonstrated resilience and consistent performance in Q3FY25, aligning with its long-term growth strategies.
