HDFC Bank Q3 FY25 earnings Preview: Here's what you can expect

HDFC Bank, India's largest private sector lender, is set to release its financial results for the third quarter (Q3) and nine months ending December 31, 2024, on January 22. The spotlight is on the bank’s loan growth, asset quality, and management commentary amid mixed market sentiment.

Business Update Highlights

In its Q3 business update, HDFC Bank reported subdued loan growth, with total advances rising by just 3 per cent year-on-year (YoY) to Rs 25.42 lakh crore. In contrast, deposits showcased robust growth, up by 15.8 per cent YoY to Rs 25.63 lakh crore. CASA deposits witnessed a modest rise of 4.4 per cent to Rs 8.72 lakh crore. Sequentially, advances and deposits saw marginal increases over the September quarter levels.

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Earnings Expectations

According to Zee Business Research estimates:

• Net Interest Income (NII): Expected at Rs 30,197 crore, up 6.5 per cent YoY from Rs 28,471 crore.
• Profit After Tax (PAT): Anticipated at Rs 16,201 crore, slightly down 1.04 per cent YoY from Rs 16,373 crore.
• Gross Non-Performing Assets (GNPA): Likely to remain flat at 1.4 per cent QoQ.
• Net NPA (NNPA): Estimated to stay stable at 0.4 per cent QoQ.

Sluggish loan growth is expected to impact overall profitability. However, the bank’s efforts to sell loans and improve the Loan-to-Deposit Ratio (LDR) could provide some respite.

Market Performance and Analyst View

HDFC Bank shares have dipped 7.66 per cent over the past month, trading at Rs 1,640.75 on January 20, 2025. However, the stock has gained 14.60 per cent over the last year, reflecting long-term investor confidence despite recent headwinds.

Key Focus Areas

Investors will closely track the management's commentary on credit growth, cost management, and festive season performance. Stable asset quality and CASA growth will remain key factors in shaping the bank’s outlook for FY25.

HDFC Bank’s Q3 performance will test its ability to balance profitability with growth amid economic challenges, maintaining its reputation as a resilient leader in India’s banking sector.