HDFC Bank shares were among the biggest contributors to the Nifty downside on Friday, ending with losses of over 2.5%. The decline follows the lender’s Q3 FY25 business update, which highlighted mixed growth metrics.
Key Highlights from the Business Update:
- Advances Growth: HDFC Bank reported a modest 3% growth in advances year-on-year (YoY) and a 0.9% sequential growth. The slower pace of growth reflects the bank’s strategic focus on lowering its Credit-Deposit Ratio.
- Deposit Growth: Deposits grew by 15.8% YoY and 2.5% quarter-on-quarter (QoQ), indicating robust deposit mobilization.
- Credit-Deposit Ratio: The ratio dropped below the 100% mark, standing at 99.18%, compared to 111.53% in the previous year. The management aims to bring this ratio further down to between 85% and 90%.
- CASA Deposits: A decline in CASA deposits on a sequential basis was noted.
Brokerage View: Nomura maintained a neutral stance on HDFC Bank with a price target of ₹1,870. It observed that while advances growth has been soft, the healthy deposit growth is a positive. However, the sequential dip in CASA deposits was highlighted as a concern.
TOPICS:
HDFC Bank