As the countdown to HDFC Bank Q4 fourth-quarter fiscal year 2024–25 results begins, the market is preparing for a showing that’s more consistent than dazzling. India’s largest private sector bank is likely to reveal only a moderate increase in its profits for the January–March 2025 quarter. As per a survey by CNBC-TV18, the bank’s net interest income (NII)—the absolute indicator of its lending earnings—is expected to increase by 5.8% from the year-ago same period. Whereas, net profit or profit after tax (PAT) is likely to rise just 3.3% YoY.
These numbers point to a comparatively muted quarter, probably driven by a mix of slowing loan demand and competitive stress on deposit costs. Analysts are also forecasting the bank’s net interest margin (NIM)—an important measure of profitability from lending business—to stay mostly unchanged on a sequential basis. That is, HDFC Bank’s capacity to extract higher earnings out of its lending business may have temporarily plateaued. The market is keen to know how the management of the bank sees the near-term picture, particularly with regard to loan growth momentum, accretion of deposits, and overall profitability strategy in a slowly changing interest rate environment.
Equirus Securities Forecasts Cautious Optimism
Brokerage house Equirus Securities has offered a cautiously optimistic assessment of HDFC Bank’s fourth-quarter results. In its preview report, the company puts the bank’s NII at ₹31,269.3 crore, up 7.5% from the corresponding period last year and 2% sequentially. While this shows some resilience in the core operations of the bank, the brokerage isn’t too positive on the margins. Equirus anticipates a fall in net interest margins to 3.4%, which would reflect mild pressure on the bank’s spreads on lending.
The profit estimate, as per Equirus, is ₹16,977.8 crore—marking an increase of 2.8% YoY and a modest 1.4% quarter-on-quarter. Still, this moderate estimate, Equirus retains a ‘long’ call on the stock at a target price of ₹1,960, reflecting its confidence in HDFC Bank’s longer-term growth potential. The company anticipates advances to grow by 4% quarter on quarter (QoQ) and deposits by 6%. This means the bank is sustaining its growth trajectory in core operations, even if profits and margins aren’t sky-rocketing.
Q4 Business Update Points to Strong Advances in Retail and Rural Loans
Earlier this month, HDFC Bank provided an insight into its fourth-quarter business performance in the form of an initial update that presented a scenario of moderate growth in major segments. As of March 31, 2025, period-end advances under management at the bank were at ₹27.73 lakh crore—a 7.7% YoY expansion, higher than ₹25.76 lakh crore a year ago. Sequentially, advances grew by 3.3% from the ₹26.83 lakh crore registered at the end of December 2024.
The largest drivers of the increase were retail loans, which grew 9% YoY, and commercial and rural banking loans, which rose by 12.8%. But not all segments improved. The corporate and wholesale loan book contracted by 3.6%, indicating that large business lending was either postponed or tactfully cut back. On the deposit front, the bank said its Current Account and Savings Account (CASA) deposits stood at ₹9.44 lakh crore—3.9% YoY and 8.2% higher from the last quarter, indicating healthy deposit inflows during a quarter normally seen as being difficult for banks.
Sharekhan Forecasts Better Profit Growth and Solid NII
Yet another brokerage firm, Sharekhan, has proposed a marginally more positive set of estimates for HDFC Bank. It has forecast the bank’s NII at ₹31,136 crore, a 7.1% YoY growth and a 1.6% QoQ improvement. These figures are approximately in line with those of Equirus and justify the notion that while growth cannot be spectacular, it is consistent.
Nonetheless, Sharekhan is looking for the pre-provision operating profit (PPOP) of the bank to drop by 11.2% year on year, although it is seeing an improvement of 4% from the previous quarter. This would mean that although core earnings are holding steady, the bank is perhaps seeing some pressure on operational efficiency or other non-interest costs. The brokerage expects the bank’s net profit to be ₹17,375 crore, up 5.2% YoY and 3.8% sequentially. Sharekhan’s numbers indicate that investors should look forward to consistent but not spectacular gains in Q4.
Interest Rate Cuts Add a New Twist to the Narrative
In a development that may have wider implications for margins and deposit pull, HDFC Bank recently cut interest rates on savings accounts. From April 12, 2025, the bank reduced rates by 25 basis points—the first revision in this segment since April 2020. Savings account holders with balances below ₹50 lakh will now earn 2.75% per annum, down from 3%. For amounts over ₹50 lakh, the rate has now been brought down from 3.5% to 3.25%.
This rate reduction comes after the Reserve Bank of India reduced the repo rate by 25 basis points in earlier April. This action is in line with a wider trend within the banking industry where lenders are modifying deposit rates following weaker monetary policy cues. Although this will assist banks in better managing funding expenses, it could also affect their capacity to attract low-cost deposits unless accompanied by robust retail banking efforts.
Deposit and Loan Growth to Reach Multi-Quarter Highs
In spite of subdued expectations for revenues, HDFC Bank will be reporting its best deposit growth in the past four quarters, and its best loan growth in five quarters. Total deposits in the March quarter are estimated by analysts to grow 14.1% YoY and 5.9% QoQ to ₹27.1 lakh crore. This is significant in a background of stiff competition for deposits and demonstrates the bank’s penetration in the market and consumer confidence.
On the lending side, overall advances are expected to increase by 5.4% YoY and 4% QoQ to ₹26.4 lakh crore. The wholesome improvement in loans and deposits indicate that the bank’s franchise is running smoothly, with symmetrical growth from retail, rural, and selective wholesale segments. Yet, such encouraging signs will have to be interpreted considering the margin squeeze and cost containment measures, as topline growth will not necessarily automatically feed into bottom-line growth.
Stability in Asset Quality a Silver Lining
If HDFC Bank has one sector where it seems to be standing solid, it’s asset quality. Based on analysts’ estimates and brokerage reports, the bank’s asset quality will either stay flat or marginally improve in the March quarter. This is specially comforting at a time when certain segments of the economy are still struggling with patchy recovery and inflationary overhangs.
The bank’s success in containing its slippages—the percentage of loans that become non-performing—will probably be a major theme in the earnings call. Although there may be a modest increase in sequential slippages, credit costs (or provisioning against bad loans) should improve. This might help mitigate some of the stress of slowing revenue growth and provide some comfort to investors about the bank’s risk management.
All Eyeson the Dividend and Management Commentary
In addition to the earnings report, HDFC Bank will also be looking at a dividend payout, which will be another area of interest for shareholders. The bank has historically had a consistent dividend policy, and any shift in payout levels will be an indicator of management’s confidence—or apprehension—regarding future cash flows and capital requirements.
Perhaps more important than the raw numbers will be the insights shared by the bank’s top brass during the post-results interaction. Investors will be keenly listening for commentary on loan growth prospects, deposit pricing strategy, response to the RBI’s recent rate cut, and digital transformation plans. In a quarter where the financial metrics may not offer many surprises, the bank’s strategic outlook could shape investor sentiment more than anything else.
