Q3 Results Review HDFC Bank Ltd and Rate Expectation

HDFC Bank Limited (also known as HDFC) is an Indian banking and financial services company headquartered in Mumbai. It is India's largest private sector bank by assets and the world's tenth-largest bank by market capitalization as of May 2024. As of April 2024, HDFC Bank has a market capitalization of $145 billion, making it the third-largest company on the Indian stock exchanges. • HDFC Bank reported 2% yoy earnings growth, led by 6% yoy operating profit growth. • The loan growth slowed to 3% yoy, while the Net Interest Income (NII) growth was marginally better at 8% yoy. • FY26 is likely to be another year of consolidation for the bank. • Retain BUY Q3FY25 Earnings Update: Positives: • Net Interest Margin (NIM) was flat qoq at 3.4%. • Deposits grew ~15% yoy. • Gross NPL ratio remained stable at 1.4%, while the net NPL ratio increased marginally to 0.5%, with both ratios flat qoq. • As of Q3FY25, the Credit Deposit ratio is at 98%, down ~160 bps qoq. • The CASA ratio was almost flat at ~35%. Negatives: • Loan growth has slowed to 3% yoy. • Non-interest income showed modest growth of ~3% yoy.