HDFC Bank loans up 15.4% but NII up only 6.7%

HDFC Bank Limited

grew gross advances 15.4% in Q1 FY27, but net interest income rose only 6.7%. The stock closed at ₹721.20 on October 1, up 1.76%, ahead of Q2 results due in mid-October. Key numbers from Q1 FY27: - Gross advances: about ₹30.6 lakh crore, up 15.4% - Deposits: about ₹31.7 lakh crore, up 14.7% - Net interest income: ₹33,530 crore, up 6.7% - Average CASA ratio: 32.3%, down from 34% - Gross NPA: 1.17%, against 1.40% a year earlier How I read it: Loans grew more than twice as fast as interest income. That gap is a margin story. A lower CASA ratio means more of the funding comes from costlier term deposits. One summary of the filing puts the margin at 3.26% on total assets. By my calculation, advances are about 96.5% of deposits, so the bank has little room to grow loans faster than deposits. Asset quality is not the issue, since gross NPA fell. I think the market is already watching margin, so a stable CASA ratio would matter more than another strong loan number. Next checkpoints: Q2 results. Sources give October 16 and October 17, and neither is confirmed. I will check CASA ratio against 32.3%, margin against 3.26%, and deposit growth against loan growth. Call: Neutral. Asset quality supports the stock. Margin has to stop falling before I turn positive. I do not hold a position in HDFC Bank Limited. Not investment advice.