Zafar Iqbal
India’s largest private lender, HDFC Bank, announced its financial results for the December quarter of FY25 on Wednesday, January 22. The bank reported a modest 2.2% year-on-year (YoY) increase in standalone net profit, reaching ₹16,735.50 crore, compared to ₹16,372.54 crore in the same quarter last year.
While the profit figures showed growth, they fell short of market expectations, which had predicted a profit of ₹17,233 crore. The bank’s performance also highlighted a significant rise in non-performing assets (NPAs), signaling mixed results overall.
Key Highlights of HDFC Bank Q3 Results
1. Net Profit Growth
The standalone net profit for the December quarter grew by 2.2% YoY to ₹16,735.50 crore, up from ₹16,372.54 crore in Q3FY24. This growth was driven by increased revenue and net interest income (NII), but it was below Street estimates.
2. Rise in Net Interest Income (NII)
The bank reported a 7.7% YoY growth in NII, reaching ₹30,650 crore, compared to ₹28,470 crore in the previous year’s quarter. This growth reflects a healthy increase in interest-earning assets and operational efficiency.
3. Increase in NPAs
- Gross NPAs: The bank’s gross non-performing assets rose to ₹36,018.58 crore, a 16.15% YoY increase from ₹31,011.67 crore in Q3FY24. The gross NPA percentage rose to 1.42%, compared to 1.26% in the corresponding period last year.
- Net NPAs: Net NPAs surged by a staggering 51% YoY to ₹11,587.54 crore, compared to ₹7,664.10 crore in Q3FY24. This sharp increase reflects the ongoing challenges in loan recovery.
4. Income and Expenses
- Total Income: The bank’s standalone income grew by 7% YoY, reaching ₹87,460.44 crore, up from ₹81,719.65 crore in Q3FY24.
- Interest Expenses: HDFC Bank paid ₹45,354 crore in interest, marking a 7.7% increase compared to ₹42,111 crore in the same quarter last year.
5. Market Reaction
Following the announcement, HDFC Bank’s shares rose by over 1%, trading at approximately ₹1,660. The rise in stock price provided some relief to markets, with the Sensex climbing 432 points and the Nifty gaining nearly 100 points.
Broader Implications for the Banking Sector
The bank’s performance highlights both opportunities and challenges. While the growth in net profit and NII indicates robust revenue streams, the sharp increase in NPAs raises concerns about asset quality. This trend could prompt investors to closely monitor the bank’s future strategies for managing bad loans.
Table: Key Financial Metrics of HDFC Bank Q3FY25
| Metric | Q3FY25 | Q3FY24 | YoY Change |
| Net Profit | ₹16,735.50 cr | ₹16,372.54 cr | 2.20% |
| Gross NPAs | ₹36,018.58 cr | ₹31,011.67 cr | 16.15% |
| Net NPAs | ₹11,587.54 cr | ₹7,664.10 cr | 51% |
| Net Interest Income | ₹30,650 cr | ₹28,470 cr | 7.70% |
| Total Income | ₹87,460.44 cr | ₹81,719.65 cr | 7% |
| Interest Expenses | ₹45,354 cr | ₹42,111 cr | 7.70% |
Conclusion
HDFC Bank’s Q3 results present a mixed bag of growth in revenue and challenges in asset quality. The modest profit growth, coupled with rising NPAs, underscores the need for enhanced risk management strategies. Despite these hurdles, the market’s positive response reflects investor confidence in the bank’s long-term potential. As India’s largest private lender, HDFC Bank’s performance will remain a key indicator of the sector’s health.
Stay tuned for more updates on the banking sector and quarterly results.
