India’s largest private lender in terms of market capitalisation, HDFC Bank will release its fiscal fourth quarter earnings today (April 19) and according to brokerage firms, the banking major is expected to report a modest single-digit growth in both profit and net interest income (NII). With slower loan growth and subdued margins, analysts projected a Q4 profit growth in the range of 3 per cent to 7 per cent for the March quarter. The topline is estimated to be between Rs 16,918 crore and Rs 17,650 crore.
In an analysis report, Nomura said, “We find HDFC Bank’s continued strong delivery on deposits in a tough macro environment encouraging. While the outlook for near-term loan growth is soft, it also implies a faster reduction in its loan-to-deposit ratio (LDR), after which the bank will be poised for loan growth acceleration, in our view. Further, system liquidity has moved to surplus towards end-Mar, and if sustained, it could further aid deposit growth.”
Earlier, the Bank had released its pre-Q4 business update wherein it posted a growth of 3.3 per cent QoQ (7.7 per cent YoY) in its gross AUM. Deposit growth was robust during the quarter at 5.9 per cent on-quarter (14.1 per cent YoY), driven by 8.2 per cent QoQ (3.9 per cent YoY) growth in CASA deposits, while term deposits grew by 4.7 per cent QoQ (20.3 per cent YoY). CASA ratio improved by ~75bp QoQ to 34.8 per cent. The loan-to-deposit ratio (calculated basis gross loans) was down approximately 180bp QoQ at 97 per cent.
On April 15, HDFC Bank had announced that it will release its Q4 earnings report today. Further, the management team will address a post earnings press conference on the same date. In a regulatory filing, it had said, “…we wish to inform you that the Bank will host an earnings call with analysts and investors at 18:00 hours (IST) on April 19, 2025, wherein the senior management of the Bank will discuss the financial results with the participants.”
Brokerage views on HDFC Bank’s Q4 results
Per analysts, HDFC Bank is expected to post a flat-to-moderate growth in NII and pre-provisioning operating profit (PPOP) on YoY basis and even sequentially. NIMs, they added, may contract marginally and net profit for the fourth quarter is estimated at around Rs 17,000 crore.
According to a CNBC TV18 poll, HDFC Bank is expected to post Q4 profit at Rs 17,058.1 crore and NII for the quarter in review is projected at Rs 30,769.3 crore.
Nuvama said, “NII is likely to grow 2 per cent QoQ / 7.5 per cent YoY. Margins could decline by 3bp QoQ and 4bp YoY. Trading gains are expected to be significantly higher QoQ. Loan and deposit growth is likely to be at 1.2 per cent and 4.2 per cent respectively.”
Another analysis report by Kotak Institutional Equities stated, “The headline reported numbers were better-than-expected on loan growth (~5 per cent YoY) but weaker than industry average reflecting the changes that they are undertaking to improve their CD ratio. CD ratio has improved QoQ to ~97 per cent (~180bps improvement QoQ). Deposits grew 14 per cent YoY. NIM to be flat QoQ. We expect the gross NPL ratio to be stable. Near term focus would be the progress of NIM (expect a positive outlook for the medium term), growth outlook and impact of PSL (FY2025).”
Sharekhan maintained that HDFC Bank’s asset quality is expected to remain broadly stable and NIMs are expected to stay flat on-quarter.
Estimates from brokerage firms
Kotak Institutional Equities
NII
Rs 31,528.60 crore; Up 8% YoY
PAT
Rs 17,418.60 crore; Up 5%
Sharekhan
NII
Rs 31,136 crore; Up 7.1%
PPOP
Rs 25,995 crore; Down 11.2%
PAT
Rs 17,375 crore; Up 5.2%
Nuvama
NII + OI
Rs 42,719.90 crore; Down 10% YoY
PPOP
Rs 25,189.60 crore; Down 14% YoY
Core PAT
Rs 17,051.50 crore; Up 3% YoY
ICICI Securities
NII
Rs 30,941.00 crore; Up 6.4% YoY
PPOP
Rs 25235.10 crore; Down 13.8% YoY
PAT
Rs 16,507.40 crore
InCred Equities
NII
Rs 31,300.00 crore; Up 7.5% YoY
PPOP
Rs 26,600.00 crore; Down 9.0% YoY
PAT
Rs 17,500.00 crore; Up 6.1% YoY
Key monitorables
In terms of key monitorables, analysts said that investors and market participants will keep an eye on:
- NIM expected to remain flat or stable QoQ (Q3 was at 3.43 per cent).
- Slippages can increase QoQ.
- Credit cost expected to improve QoQ.
- Asset quality is expected to remain broadly stable.
- Management commentary on business growth.