HDFC Bank share price will be in focus on Monday after the country’s largest private sector lender reported its December quarter business update, witnessing a moderate increase in its gross advances and a strong growth in deposits. HDFC Bank stock price had closed 2.46% lower at ₹1,749.30 apiece on the BSE Friday.
HDFC Bank’s gross advances in the third quarter of FY25 increased 3% year-on-year (YoY) to ₹2,54,250 crore. The gross advances grew 0.9% sequentially.
The bank’s total deposits in Q3FY25 rose by 2.5% quarter-on-quarter (QoQ) and 15.8% YoY, to ₹2,56,350 crore, HDFC Bank said in a regulatory filling.
CASA deposits declined by 1.2% QoQ and 4.4% YoY, to ₹87,250 crore. The CASA ratio in the December quarter decreased to 34.04% from 35.34% in the September quarter and from 37.74% in the same period last year.
HDFC Bank’s average advances under management (advances grossing up for inter-bank participation certificates, bills rediscounted and securitisation / assignment) were ₹26,27,600 crore for the December 2024 quarter, a growth of around 7.6% YoY, and a growth of around 2.5% QoQ.
“HDFC Bank’s Q3 business update reflects mixed trends. However, the Credit-Deposit Ratio slipped below the critical 100% threshold, declining to 99.18% from 111.53% a year ago, signalling slower credit demand than the deposit inflow. CASA deposits (current and savings accounts), a key indicator of low-cost funding, witnessed a sequential decline, which could impact net interest margins in the near term,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.
While deposit growth remains positive, the subdued loan growth and declining CASA raise questions about the bank’s growth momentum amid tightening liquidity and a challenging macroeconomic environment. A focused strategy will be critical to sustaining profitability and navigating headwinds, Jain added.
Investment in Other Banks
In a separate regulatory filing on Friday, HDFC Bank said that it received approval from the Reserve Bank of India (RBI) to acquire a stake of up to 9.5% in Kotak Mahindra Bank, AU Small Finance Bank and Capital Small Finance Bank within a year from the approval date.
Should you buy HDFC Bank shares?
Mahesh M Ojha, AVP — Research at Hensex Securities, recommends a ‘buy on dip’ strategy for HDFC Bank stock.
“A ‘buy on dip’ strategy can be good in HDFC Bank stock after the Q3 business update. Traders can buy HDFC Bank shares around ₹1,710 – 1,720 levels, with a Stop Loss at ₹1,668, and medium term target price of ₹1,850 – 1,900,” Ojha said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
