HDFC Bank (HDFCBANK) Q2 24/25 earnings summary

Executive summary

• Net profit for Q2 FY25 reached ₹168 bn (₹16,821 crore), up 5.3% year-over-year, with consolidated profit at ₹178.3 bn (₹17,826 crore), reflecting the impact of the recent amalgamation and expanded operations.

• Average deposits grew 15.5% year-over-year, with retail branches contributing 84% of total deposits.

• Asset quality remained stable with gross NPA at 1.36% and net NPA at 0.41%.

• Capital adequacy ratio stood at 19.8%, with CET1 at 17.3%.

• Results for the half year include the operations of the amalgamated entity, making year-over-year comparisons less meaningful.

Financial highlights

• Standalone net interest income for Q2 FY25 was ₹301.1 bn, up 10.0% year-over-year; non-interest income rose 7.2% to ₹114.8 bn.

• Net interest margin (NIM) remained stable at 3.46%.

• Gross NPA stable at 1.36%, with gross slippages at 1.2%, an improvement over the previous year.

• Profit after tax was INR 16,800 crore, showing an optical growth of 5.3%, but adjusted for bond gains and tax, the growth rate is 17%.

• Fee income grew 17% year-over-year, with third-party distribution products up 32%.

Outlook and guidance

• Credit growth for FY 2025 will be slower than the system, aligning with system growth in FY 2026, and expected to outpace the system in FY 2027.

• Accelerated reduction in LDR/CD ratio is planned, aiming for high 80s within 2-3 years instead of the earlier 4-5 year timeline.

• The Board approved the process for an IPO of HDB Financial Services, subject to regulatory and market conditions.

• The impact of revised RBI investment portfolio norms is not fully ascertainable for future periods.

• The bank is positioning itself for a potential change in the credit environment over the next 2-3 years.