HDFC Bank hits highest level in CY25, nears record high; up 9% in 2 weeks

HDFC Bank shares continued at its upward movement for the seventh straight day, up 2 per cent to ₹1,843.90, its highest level in calendar year 2025 (CY25), on the BSE in Tuesday’s intra-day trade. In the past one week, the stock has rallied 9 per cent. It is trading close to its record high level of ₹1,880 touched on December 9, 2024.

 

Meanwhile, in the past one year, HDFC Bank has outperformed the market by surging nearly 30 per cent, as compared to the 8 per cent rise in the BSE Sensex.

 

Today’s gain in HDFC Bank shares came after the Reserve Bank of India (RBI), on Monday, announced changes in the Priority Sector Lending (PSL) norms.  In a revised circular, RBI has increased the housing loan limits eligible under PSL from ₹35 lakh to ₹50 lakh in metropolitan cities, and from ₹25 lakh to ₹45 lakh in towns with populations between 1.0– 5.0 million, while for towns with populations below 1 million, the limit is set at ₹35 lakh. Loans to bank employees and those backed by long-term bonds are excluded. However, loans to government agencies for slum rehabilitation or projects with at least 50 per cent Floor Space Index (FSI) for units under 60 sq.m carpet areas will qualify.  ALSO READ | Stock Market LIVE Updates: Sensex slips below 78,000; Nifty at 23,650 The increase in home loan limit will aid credit growth and achieve PSL target supporting margins, ICICI Securities said.  Meanwhile, HDFC Bank in an exchange filing, said the board of directors of the Bank is scheduled to meet on April 19, 2025, to consider and approve the audited financial results of the Bank for the quarter/ year ended March 31, 2025.

 

 

HDFC Bank continues to benefit from a strong capital position, best-in-class asset quality, and a non-specific provision buffer of 1.4 per cent of loans, providing long-term comfort, according to analysts. 

 

Axis Securities has a ‘buy’ rating on HDFC Bank with a target price of ₹2,000 per share. HDFC Bank has maintained pristine asset quality across cycles, which can be credited to its strong underwriting practices and risk-calibrated lending. While slippages in the December quarter (Q3FY25) were marginally higher, led by seasonally high agri slippages, the management indicated that ex-agri slippages have remained flat QoQ. 

 

The management also emphasised that asset quality metrics across segments remain best-in-class, and the bank is confident that these trends are sustaining. The brokerage firm does not expect any major asset quality challenges and they believe credit costs are likely to be contained at ~50bps over the medium-term.  ALSO READ | Punjab & Sind Bank shares soar 13% after setting floor price for QIP

 

“HDFC Bank remains an outlier among banks because of its strong asset quality performance, given the rising stress, especially in the unsecured segment. Thus, supported adequate levers to improve net interest margins (NIMs), controlled Opex growth and improving productivity ensuring cost ratio moderation, and pristine asset quality ensuring controlled credit costs should enable HDFC Bank to deliver an improving trend on return ratios. RoA/RoE is expected to range between 1.8-1.9 per cent/14-15 per cent over FY25-27E,” the brokerage firm said in its Q3 result update.

 

Analysts at Emkay Global Financial Services, meanwhile, expect the bank to remain focused on Loan-to-Deposit Ratio (LDR) moderation via credit portfolio sell-off and deposit acceleration, which may keep margins in check. The bank is in the process of listing NBFC – HDB Financial Services, but near-term asset-quality stress could weigh on valuation. The brokerage firm retains 'Buy' rating on HDFC Bank with unchanged target price of ₹2,100.