HDFC Bank's share price saw a modest increase in early trading on Monday following the release of its fiscal first-quarter results for June 2024. Despite a downturn in the broader market, with the Nifty 50 falling by 0.5% and the Bank Nifty by 0.6%, HDFC Bank's shares managed to gain over 1%.
During Q1FY25, HDFC Bank reported a net profit of ₹16,175 crore, marking a slight decline of 2% from the previous quarter's ₹16,512 crore. The bank's Net Interest Income (NII) rose to ₹29,837 crore, a 2.6% increase from ₹29,078 crore in Q4FY24, with a net interest margin (NIM) improvement of 3 bps quarter-on-quarter to 3.47%.
However, asset quality showed a sequential deterioration, with gross non-performing assets (NPAs) rising 6% to ₹33,026 crore, and net NPAs increasing by 17.5% to ₹9,508.4 crore. The gross NPA ratio rose by 9 bps to 1.33%, and the net NPA ratio increased by 6 bps to 0.39%.
Brokerage firms provided varied assessments of HDFC Bank's performance. Motilal Oswal noted an in-line performance with marginal margin improvement and controlled provisions, projecting a moderate loan growth trend in FY25 and FY26E. They maintained a 'Buy' rating with a target price of ₹1,850 per share, expecting robust return ratios supported by reduced high-cost borrowings and enhanced operating leverage.
Antique Stock Broking remained optimistic, highlighting stable profitability and asset quality metrics, forecasting a return on assets (RoA) of 1.8% – 1.9% and return on equity (RoE) of 15% – 16% over FY25-27E. They upheld their 'Buy' rating with an unchanged target price of ₹1,900 per share.
Emkay Global expressed concerns over deposit growth in Q1FY25 but maintained a positive outlook, reducing credit growth estimates while emphasizing contained credit costs. They reiterated a 'Buy' call with a target price of ₹2,000 per share, citing incremental deposit mobilization and the upcoming IPO of HDB Financial Services as pivotal near-term factors.
As of 9:20 am, HDFC Bank shares were trading 0.68% higher at ₹1,618.10 apiece on the BSE.
Please note, the views expressed above are those of individual analysts or brokerage firms and not endorsed by Mint. Investors are advised to consult certified financial experts before making investment decisions.