HDFC Bank shares gain 3% on strong Q4 business growth

Shares of HDFC Bank rose nearly 3% in opening trade on Friday, despite volatility in the broader market, as sentiments were lifted by solid performance in March quarter, with advances growth surpassing Street estimates. The stock outperformed the banking sector and was the top gainer in the BSE Sensex pack.

Snapping previous session losses, HDFC Bank shares opened 0.8% higher at ₹1,808 on the BSE, after ending 0.2% lower at ₹1,793.70 on Thursday. In the first hour of trade so far, the banking heavyweight gained as much as 2.7% to ₹1,842.20, while its market capitalisation climbed to ₹14.08 lakh crore. On the other hand, the BSE Sensex and NSE Nifty were down by 0.6%, while the BSE bankex index was up 0.2%.

At the current level, the stock is just 3% away from its 52-week high of ₹1,880 touched on December 9, 2024, rebounding nearly 29% from its 52-week low of ₹1,430.15 hit on May 13, 2024. The bluechip banking stock has given 20% return to its shareholders in the last one year; 11% in six months; and 3% in the calendar year 2025. In the last one month, the counter has added over 7%, whereas it gained over 1% in a week.

HDFC Bank reports robust growth in Q4

For the fourth quarter ending March 31, 2025, HDFC Bank has reported 5.4% year-on-year (YoY) and 4% quarter-on-quarter (QoQ) growth in gross advances at ₹26.4 lakh crore. This growth was primarily driven by strong performances in retail and commercial banking.

As per the business updates filed with the BSE, retail loans rose by 9% YoY, commercial & rural banking grew by 12.8% YoY, whereas wholesale loans declined by 3.6% YoY.

On the other hand, deposits surged 14.1% YoY and 5.9% QoQ to ₹27.1 lakh crore. The current account and savings account (CASA) deposits saw robust growth of 8.2% QoQ (up 3.9% YoY) to ₹9.4 lakh crore while term deposits increased by 20.3% YoY and 4.7% QoQ. The bank’s average deposit growth remained modest at 3.1% QoQ (15.8% YoY), while average CASA growth was subdued at 1.4% QoQ (5.7% YoY). The credit-to-deposit (CD) ratio, the percentage of a bank's deposits that are used to provide loans, declined to 96.5% in Q4 FY25, down 177 basis points QoQ.

“HDFC Bank’s business growth remained solid, with advances growth surpassing our estimates,” domestic brokerage Motilal Oswal said in a report that. Deposit growth was strong, outperforming system deposit growth, while CASA deposits saw robust expansion, driving the CASA ratio to 34.8% (up 79bp QoQ), it said.

The brokerage has maintained ‘Buy’ call on HDFC Bank shares with a target price of ₹1,792 per share.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)