HDFC Bank is gearing up to unveil its financial performance for the March quarter, with preliminary figures indicating a 5.4% year-on-year growth in total advances, reaching an impressive ₹26.4 lakh crore. As the bank approaches this important announcement, analysts anticipate stable outcomes, largely attributed to a more tempered credit growth which may affect the loan-to-deposit ratio.

Expectations for Loan Growth

Financial analysts from Elara Securities and Deven Choksey Research predict a modest increase in loan growth for HDFC Bank, estimating a rise of just over 3% quarter-on-quarter and approximately 4% year-on-year. This adjustment aligns with the bank’s strategy to fine-tune its credit-to-deposit ratio, which is expected to stabilize within the 94-95% range. Meanwhile, Yes Securities forecasts a more conservative 2% sequential growth in loans.

Key Financial Projections for Q4 FY25

Here’s a snapshot of what analysts expect for HDFC Bank’s Q4 FY25 results:

• Net Profit: Projected to increase by 2% to ₹16,908 crore.
• Net Interest Income (NII): Anticipated to climb nearly 8% to ₹31,297 crore.
• Net Interest Margin (NIM): Expected to rise by 18 basis points, reaching 3.42%, though remaining flat compared to the previous quarter.

Insights into Deposits and Profitability

Despite a slowdown in loan growth, HDFC Bank’s net interest income is set to grow nearly 15% year-over-year and 9% quarter-over-quarter, largely driven by a strategic reduction in excess borrowings. According to Deven Choksey, the bank’s emphasis on refining its liability mix and managing high-cost borrowings is likely to enhance its profit margins, even in a climate of moderate loan expansion.

Stability in Asset Quality

Most market analysts believe that the asset quality of HDFC Bank will remain stable, with lower slippages expected sequentially. Reports from Emkay Global Financial Services and Elara Securities suggest a reduction in stress levels within the bank’s Kisan Credit Card portfolio. However, Yes Securities has pointed out a potential increase in provisions, reflecting seasonal trends.

As HDFC Bank prepares to share its quarterly results, all eyes will be on how these projections translate into actual performance, particularly in the context of a shifting economic landscape. This vital information will be key for investors and stakeholders alike, as they navigate the bank’s financial trajectory moving forward.