HDFC Bank hits record high, rallies 7% in 3 days ahead of Q4 results

HDFC Bank’s share price hit a record high of ₹1,885, gaining 1 per cent on the BSE in Wednesday’s intra-day trade in an otherwise subdued market. In the past three days, the stock price of the leading private sector bank has rallied 7 per cent ahead of its March 2025 quarter (Q4FY25) results scheduled for release on Saturday, April 19, 2025. The market price of HDFC Bank has surpassed its previous high of ₹1,880 touched on December 19, 2024.

 

HDFC Bank is among the top three players in auto loans, personal loans, commercial vehicles, cash management and supply chain management. The bank’s strengths include its brand equity, professional management, distribution reach, high CASA, clean book, and focus on profitability.

 

 

Among banks that have provided business updates, HDFC Bank surprised positively on credit growth.

 

According to the Q4FY25 pre-earnings update of HDFC Bank, its period end deposits grew to ₹27.14 trillion, up 14.1 per cent year-on-year (Y-o-Y) and around 6 per cent sequentially.

 

The country's largest lender has gained ₹1.5 trillion in deposits in the Q4FY25, marking the highest gain in any quarter during FY25. In Q3, the bank gained ₹63,500 crore in deposits, while in Q2, the gain was ₹1.2 trillion.

 

Its average deposits were up almost 16 per cent Y-o-Y and 3.1 per cent sequentially to ₹25.28 trillion. Current account savings account (CASA) deposits were up 5.7 per cent Y-o-Y and 1.4 per cent sequentially to ₹8.29 trillion.

 

“Once again investors appear to see reason in our assertion calling for HDFC Bank as a potential positive surprise candidate in the upcoming earnings season. This is predicated on yield-supportive shift in loan mix, high-cost liability retrials and some easing in CD rates. Most investors agreed with our view of a potential flat- to-mild increase in margins sequentially, vs a small decline for other banks”, BNP Paribas said in a financial sector update.

 

Slower credit growth could keep earnings in check. The margins are likely to be a key monitorable. The slippages are to decline quarter-on-quarter (QoQ) due to lower Kisan Credit Card (KCC) slippages, analysts at Emkay Global Financial Services said in the Q4FY25 preview.

 

The brokerage firm believes reduction of risk weights by 25 per cent on non banking finance company (NBFC) and micro finance institution (MFI) loans (and not PL), wef April 1, 2025, shall improve banks’ tier-I capital by 8-90bps (mainly for CBK, BOB, HDFC Bank, IDFC Bank, Bandhan) and may revive growth from Q1FY26E in the medium-to-long run, subject to no asset quality risk emerging in the segment.

 

Meanwhile, HDFC Bank’s efforts at aggressively improving LDR are yielding results, and analysts at Axis Securities expect the loan-to-deposit (LDR) to improve to ~87 per cent by FY27E. Amidst challenges on deposit mobilisation, especially CASA deposits, the bank continues to ensure a strong pace of TD growth to enable HDFC Bank to build a sticky customer base. 

 

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 (i) Adequate levers to improve NIMs, (ii) Controlled Opex growth and improving productivity ensuring cost ratio moderation, and (iii) 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 post Q3 results.