HDFC Bank: Loan Surge Cheers Shareholders

HDFC Bank’s loan book grew 11.9% year-on-year to Rs 28.44 lakh crore in Q3 FY26, finally outpacing deposits at 11.5% growth to Rs 28.59 lakh crore. This marks a healthy rebound from post-merger slowdowns, with advances expanding 2.7% sequentially amid festive demand and GST cuts. The CD ratio edged up to 98.5–99.5%, still high but showing better balance as CASA deposits rose 10% to Rs 9.6 lakh crore. ​ For

shareholders, this acceleration is a strong positive signal. It ends single-digit credit growth woes, boosts net interest income potential, and aligns with plans to match system growth in FY26 before outpacing it in FY27. ROA remains top-tier at around 1.96% annualized, reflecting efficient operations despite the merger drag. At 2.8–2.9x P/B and 19–21x P/E—near 10-year lows—the stock trades at an attractive entry for a quality lender regaining momentum. ​ Yet, risks linger that could dent value. Elevated CD ratio above 98% raises liquidity worries if deposits lag further, especially with system-wide gaps widening. Profit booking has pushed shares down 5% weekly to around Rs 950–980 despite upbeat updates, signaling market caution on sustained execution. Any NIM squeeze from high-cost time deposits or asset quality slips would hurt earnings. ​ Overall, the loan rebound is beneficial for long-term shareholders, offering growth revival at cheap valuations, but high CD demands vigilant deposit mobilization to avoid volatility.