India’s largest private sector lender, HDFC Bank, has reported a robust performance for the fourth quarter of FY25. The bank posted a 6.7% year-on-year increase in standalone net profit at ₹17,616 crore, exceeding analysts’ expectations. On a sequential basis, net profit rose 5.3%, highlighting sustained momentum in earnings.
The bank’s net interest income (NII) rose by 10.3% to ₹32,070 crore, supported by solid loan growth and stable margins. HDFC Bank’s net interest margin (NIM) stood at 3.54% on total assets, and 3.73% based on interest-earning assets. Excluding a one-off income tax refund, the core NIM was recorded at 3.46% on total assets.
This strong performance is attributed to the bank’s strategic focus on expanding its credit portfolio while maintaining a disciplined approach to cost and risk. Investors responded positively, as HDFC Bank share price climbed nearly 2% intraday following the results announcement.
Asset Quality Remains Strong, GNPA Declines Sequentially
The bank continued to display strength in managing credit risk, with Gross Non-Performing Assets (GNPA) improving to 1.33% as of March 31, 2025, compared to 1.42% in the previous quarter. However, this marked a slight uptick from 1.24% a year ago, indicating some seasonal pressures.
Despite this marginal yearly rise, analysts view the improvement in sequential asset quality as a positive sign, particularly in a high-interest environment. Slippages remained contained, and the loan-to-deposit ratio (LDR) also improved, further strengthening the bank’s balance sheet.
According to management commentary, India’s macroeconomic stability, aided by two RBI rate cuts and a shift in policy stance to “accommodative,” has contributed to a favorable lending climate. HDFC Bank’s overall provisioning remains adequate, and capital adequacy ratios remain well above regulatory norms.
Brokerages Maintain Bullish View, Raise Target Prices
Leading domestic and global brokerage houses remain optimistic about HDFC Bank’s future. CLSA, Macquarie, UBS, and Nuvama Institutional Equities have all either retained or upgraded their ratings, citing improvements in loan growth, core margins, and asset quality.
Macquarie maintained its ‘Outperform’ rating, pointing to the bank’s potential for return on asset (ROA) improvement in the next two years. Nuvama raised its target price to ₹2,195, citing enhanced operating leverage, lower slippages, and growing deposit market share.
UBS also raised EPS estimates for FY26 and FY27, noting improved system liquidity and consistent performance. Jefferies stated that HDFC Bank’s net profit exceeded expectations, driven by improved cross-sell, stable credit costs, and healthy net interest margins.
Market watchers believe that the bank’s focus on gradual retirement of high-cost borrowings, combined with better operating efficiency, will enhance profitability going forward.
HDFC Bank Share Price Gains 8% in Last 5 Sessions
HDFC Bank’s stock has gained over 8% in the last five trading sessions, signaling renewed investor confidence after a turnaround from four relatively subdued quarters. The share price rose to ₹1,943 on April 21, marking a 1.9% increase from the previous day’s close and indicating strong market optimism surrounding the bank’s latest quarterly performance. This uptick reflects not only short-term enthusiasm but also a broader belief in the bank’s long-term growth story.
Analysts suggest that if the current upward momentum continues, HDFC Bank’s share price could soon retest its 52-week high, potentially breaking into new territory. Contributing to this positive outlook is the bank’s recent dividend declaration of ₹22 per share, which has added further weight to the bullish sentiment among retail and institutional investors alike.
When compared to its peers, such as ICICI Bank, HDFC Bank continues to stand out for its higher financial stability, robust capital adequacy, and superior asset quality. With improved profitability metrics, a significantly larger balance sheet, and strong deposit traction, HDFC Bank remains a preferred choice for long-term investors seeking a blend of safety, consistent returns, and future growth potential.
Conclusion
With a strong Q4 showing, improved asset quality, healthy margins, and growing investor interest, HDFC Bank has once again reaffirmed its position as a market leader in India’s banking sector. The bank’s consistent performance across key financial metrics, including robust loan growth and stable net interest margins, reflects its sound operational strategy and effective risk management practices. Furthermore, a steady decline in gross NPAs and improved credit quality underscore the bank’s resilience in a dynamic economic environment. Backed by favorable macroeconomic conditions such as lower interest rates, improving liquidity, and rising credit demand, along with a wave of positive sentiment from top brokerages, HDFC Bank appears well-positioned not only for sustained growth in FY26 but also for enhanced profitability and market share in the long term.
