HDFC Bank Ltd. share price target

Q3FY2025 numbers were broadly in line given the transition period. NII at Rs. 30,653 crore (up 8% y-o-y/2% q-o-q) in line with estimates, led by stable NIM of ~3.4% (marginally declined by 3 bps q-o-q led by interest income reversals on NPA agri portfolio) and net loan growth of ~1% q-o-q.

HDFC Bank (HDFCB) reported 3QFY25 net profit of INR167.4b (2.2% YoY growth, in line).NII grew 7.7% YoY to INR306.5b (in line). NIMs contracted 3bp QoQ to 3.43%.

HDFC Bank’s key focus remains on higher retail deposit mobilisation. The bank intends to bring down its CD ratio at a faster pace to 85-87% level; and as and when the credit cycle turns over the next couple of quarters, the bank wants to be well-positioned to capture the incremental growth that it has seen in the pre-merger period

HDFCB’s management reiterated its unwavering focus on customer satisfaction, arresting employee attrition, upgrading tech, and reducing regulatory friction.

HDFC Bank has largely outperformed its large private peers in the recent past, primarily on account of its relatively better margin, asset quality outcomes amid rising asset quality noises in unsecured loans.

We maintain our BUY recommendation on the stock

HDFC Bank reported a 3% PAT beat at Rs168bn/1.9% RoA, primarily due to stable margins, contained opex, and provisions.

HDFC Bank reported broadly in-line performance with strong deposit growth in Q2FY2025. Given the transition period, management’s relentless focus is towards balance sheet management and stability in return ratios.