HDFC Bank Q3 PAT may rise 25%, asset quality key: Poll

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26 Aug, 2025 12:21

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HDFC Bank, the second largest private sector lender in India, will announce its third quarter (October-December) earnings on Friday. A CNBC-TV18 poll of analysts expect relatively strong earnings with 25 percent PAT growth fueled by stable provisions and operating leverage, compared to the weaker second quarter that was on account of higher cost of funding.

In Q2, HDFC Bank’s profit after tax fell below 30 percent growth for the first time in last more than 40 quarters. Hence, this time analysts are working with a little more conservative estimate, but 25% is still much above industry average.

Net interest income (growth of 15 percent in Q2, the lowest in last seven quarters), net interest margin and loan growth are expected to bounce back in the third quarter.

Even asset quality of the lender is expected to be stable during the quarter, but that will be closely watched by analysts. The reason is that its peers Axis Bank and YES Bank reported a rise in non-performing assets in the quarter gone by.

Profit after tax may increase 25 percent sequentially to Rs 2,324 crore and net interest income is seen rising 24 percent to Rs 4,723 crore in the third quarter.

Analysts expect uptick in net interest margin as it was down 30 basis points to 4.3 percent in second quarter sequentially due to high cost of funding.

Religare expects a marginal uptick in net interest margin while Credit Suisse sees 10-15 basis points improvement. HDFC Bank has benefitted the most from FCNR deposit scheme with an inflow of USD 3.4 billion improving liquidity.

According to poll, loan growth is expected to be 19-20 percent, but that might be subdued at 15-16 percent. It was 16 percent loan growth in Q2. The management had said they don’t want to chase loan growth under tight liquidity conditions and didn’t buy mortgages in Q2 which they usually do.