21-07-2025
HDFC Bank shares gain 2% on 12% YoY profit jump. Is it time to buy?
Shares of HDFC Bank jumped 2% to the day's high of Rs 1,998.75 on BSE on Monday after the lender reported a 12% year-on-year (YoY) rise in standalone net profit to Rs 18,155 crore for Q1FY26, compared to Rs 16,175 crore in the same quarter last year.
ADVERTISEMENT Interest income rose 6% YoY to Rs 77,470 crore, while net interest income (NII) increased 5.4% to Rs 31,440 crore. The bank's core net interest margin (NIM) stood at 3.35% on total assets, down from 3.46% in the March 2025 quarter, reflecting faster repricing of assets than Bank declared its first-ever bonus issue in a 1:1 ratio. Shareholders holding fully paid-up equity shares as of the record date of August 27 will receive one bonus share for every share held.
The bank also announced a special interim dividend of Rs 5 per share for FY26, with the record date set as July 25. The dividend will be paid on August and contingencies for the quarter stood at Rs 14,440 crore, which includes floating provisions of Rs 9,000 crore and additional contingent provisions of Rs 1,700 crore, compared to Rs 2,600 crore in the quarter ended June 30, bank's average deposits were reported at Rs 26,57,600 crore for the June 2025 quarter, marking a 16.4% growth over Rs 22,83,100 crore in June 2024 and a 5.1% increase over Rs 25,28,000 crore in March 2025.
ADVERTISEMENT Gross advances were reported at Rs 26,53,200 crore as of June 30, 2025, an increase of 6.7% over June 30, 2024. Advances under management grew by 8% over June 30, 2024.
Gross NPA ratio was at 1.40% as of June 30, 2025 (1.14% excluding agricultural NPAs), compared to 1.33% in both Q4FY25 and Q1FY25.
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As of June 30, 2025, HDFC Bank operated 9,499 branches and 21,251 ATMs across 4,153 cities, with 51% of branches located in semi-urban and rural has maintained a 'Buy' rating on HDFC Bank with a target price of Rs 2,270.
ADVERTISEMENT The brokerage noted that the bank's results were largely in line and reiterated HDFC Bank as its preferred pick among large private banks due to its improved growth outlook. The bank is expected to benefit from RoA expansion levers such as deposit substitution for higher-cost borrowings, a reduction in RIDF investments, and lower operating expenses as branch additions drive operating leverage. Antique is largely retaining its estimates and has rolled them over to 1HFY28E, valuing the standalone bank at 2.3x price-to-book.
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