HDFC Bank Q4 Preview: Modest profit, NII growth likely amid weak loan growth momentum

During the January-March period, HDFC Bank’s stock has risen by 3 percent

HDFC Bank, the largest private lender in India, is expected to report a modest single-digit increase in both profit and net interest income (NII) for the quarter ended March 2025 (Q4FY25), as the bank faces slower loan growth and subdued margins. The bank is scheduled to announce its Q4 results on April 19, 2025.

According to Moneycontrol's poll of 5 brokerage estimates, HDFC Bank’s NII is projected to rise by 7.3 percent year-on-year (YoY) to Rs 31,200 crore, compared to Rs 29,077 crore in Q4FY24. The bank’s profit is likely to grow by 3.3 percent YoY to Rs 17,072 crore, up from Rs 16,512 crore in the same quarter last year.

Estimates of analysts polled by Moneycontrol are shown to be in a narrow range, meaning any positive or negative surprises may elicit a sharp reaction in the stock price. Among the brokerages polled, Sharekhan rolled out the most bullish projections while YES Securities forecasted the slowest growth for HDFC Bank.

What factors are driving the earnings?

Stable asset quality: Most analysts agree that the bank is expected to report lower slippages on a sequential basis in Q4, mainly due to a decline in slippages under the Kisan Credit Card (KCC) segment. According to analysts at Phillip Capital, the bank’s net non-performing asset (NNPA) ratio is estimated at 0.47 percent in Q4FY25, slightly lower than 0.46 percent in the previous quarter.

Muted margins: Brokerages expect HDFC Bank’s margins to stay broadly flat during the quarter due to higher funding costs. Net interest margins (NIMs) are expected to be around 3.5 percent in Q4FY25, nearly unchanged from 3.4 percent in Q4FY24, as per estimates from Elara Capital.

Soft loan growth: Loan growth is also expected to remain weak during the quarter. Analysts at Elara Capital project a 3.4 percent YoY increase in the loan book, taking it to Rs 25.6 lakh crore in Q4FY25 from Rs 24.8 lakh crore in the same quarter last year.

What to look out for in the quarterly show?

One of the key factors that brokerages will be watching is the bank’s credit-to-deposit (CD) ratio, which became a major point of discussion during the merger of HDFC Bank with the former HDFC Ltd. In addition to that, the trend in margins and the bank’s overall growth guidance will be closely monitored.

During the January-March period, HDFC Bank’s stock has risen by 3 percent, outperforming the Nifty 50 index, which declined by 2 percent during the same period.

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