HDFC Bank Rose on Upbeat Q4FY25 Results and Brokerage Targets

The HDFC Bank share price rose upto 2.3 percent on NSE in early trade after the bank recently announced its financial results for the quarter ending March 2025 (Q4FY25), delivering a performance that exceeded market expectations. The bank reported a standalone net profit of Rs. 17,616 crore, marking a 6.7 percent rise compared to Rs. 16,511.85 crore in the same quarter last year. This growth in profitability was driven by a 10.3 percent year-on-year increase in net interest income (NII), which stood at Rs. 32,070 crore. The bank’s net interest margin (NIM), a key profitability metric in banking, reached 3.54 percent of total assets.

HDFC Bank’s operating profit before provisions declined by 9.3 percent year-on-year but increased by 6.14 percent quarter-on-quarter to Rs. 26,536.70 crore. The bank’s operating expenses fell by 10 percent year-on-year to approximately Rs. 43,900 crore.

Asset Quality & Provisions

Asset quality remains an important factor for any lender. HDFC Bank’s gross non-performing asset (GNPA) ratio stood at a healthy 1.13 percent, improving from 1.42 percent in the previous quarter, though slightly up from 1.24 percent. The net non-performing assets (NNPA) followed a similar trend, registering 0.43 percent this quarter, down 0.46 percent sequentially but up from 0.33 percent. Provisions for the quarter dropped by 76.4 percent year-on-year to Rs. 3,190 crore.

Advances & Deposits

The bank’s average advances under assets under management were approximately Rs. 25 lakh crore for the quarter, a 7.3 percent year-on-year growth. On the liability front, average deposits rose to about Rs. 27 lakh crore, supported by a strong retail franchise and a healthy CASA (current and savings account) ratio of 35 percent, aiding a low-cost funding base.

Segment Analysis

For the March 2025 quarter, on a standalone basis, the retail banking segment,, including both digital and non-digital banking, contributed 49.08 percent, followed by 33.19 percent from wholesale banking, 11.31 percent from treasury, and 6.4 percent from other banking operations.

Solvency Ratios

The capital adequacy ratios showcase the bank’s financial strength. For Q4FY25, the capital adequacy ratio stood at 19.6 percent and the Common Equity Tier 1 (CET1) ratio at 17.2 percent, which is well above regulatory requirements. This strong capitalization offers a buffer to absorb potential risks and support long-term growth plans. 

Brokerage Targets, Outlook, and Dividend

Analysts have viewed the Q4FY25 results positively. Brokerages like Jefferies, UBS, and Nuvama maintained “Buy” ratings, with price targets of Rs. 2,340, Rs. 2,250, and Rs. 2,190, respectively, implying a potential upside of 14 to 23 percent.

The bank’s ability to maintain asset quality while expanding its loan book and improving margins is seen as a positive sign. CFO Srinivasan Vaidyanathan mentioned that in FY26, the bank aims to grow in line with the market rate, while in FY27, it plans to gain market share in loans and target a credit-deposit ratio of 85 to 90 percent, according to sources.

The board has recommended a final dividend of Rs. 22 per share, representing 2,200 percent of the face value of Re. 1 per share, reflecting continued confidence. HDFC Bank has consistently raised dividends since 2021. The record date for dividend eligibility is Friday, June 27, 2025.

Company Overview

HDFC Bank is India’s largest private sector bank, which offers a comprehensive range of financial services to individuals, businesses, and corporations. Its business model centers on earning interest from loans and advances and generating fee-based income from banking, investment, insurance, and digital services, delivered through extensive physical and digital channels.