HDFC Bank’s share price increased by over 1% in early trading on Monday after the bank reported its earnings for the first quarter of fiscal year 2025. This rise in share price comes even as the broader market is down, with the Nifty 50 dropping 0.5% and the Bank Nifty falling 0.6%.
HDFC Bank reported a net profit of ₹16,175 crore for Q1FY25, a 2% decline from ₹16,512 crore in the previous quarter. The bank’s Net Interest Income (NII) rose by 2.6% to ₹29,837 crore compared to ₹29,078 crore in the March quarter. The net interest margin (NIM) improved slightly by 3 basis points to 3.47%.
However, the bank’s asset quality worsened, with gross non-performing assets (NPA) increasing by 6% to ₹33,026 crore and net NPA jumping 17.5% to ₹9,508.4 crore. The gross NPA ratio rose to 1.33% from 1.24%, and the net NPA ratio increased to 0.39% from 0.33%.
Here’s what some brokerage firms have to say about HDFC Bank’s Q1 results and its stock:
Motilal Oswal:
HDFC Bank’s performance was in line with expectations, showing slight margin improvement and controlled provisions. The bank’s loan growth declined by 1% due to wholesale factors. Motilal Oswal expects HDFC Bank to grow deposits by 16% and loans by 10.1% annually over FY24-26. They maintained a ‘Buy’ rating with a target price of ₹1,850 per share.
Antique Stock Broking:
Despite a major merger, HDFC Bank has maintained stable profitability and asset quality ratios, which shows its resilience. Antique Stock Broking remains positive on the bank, expecting a return on assets (RoA) of 1.8% – 1.9% and a return on equity (RoE) of 15% – 16% over FY25-27. They kept their ‘Buy’ rating with a target price of ₹1,900 per share.
Emkay Global:
HDFC Bank’s deposit growth disappointed in Q1FY25 after a strong Q4FY24. Emkay Global cut its credit growth estimates for FY25-27 to 10-12% from 12-14% but retained a ‘Buy’ rating with a target price of ₹2,000 per share. They believe that deposit mobilization and the IPO of HDB Financial Services are key factors to watch.
As of 9:20 am, HDFC Bank shares were trading 0.68% higher at ₹1,618.10 on the BSE.
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