HDFC Bank Q4 FY25 Results: Net Profit Rises 6.7% YoY, Beats Street Expectations

HDFC Bank, India’s largest private sector lender, posted a strong set of numbers for the fourth quarter ended March 31, 2025. The bank reported a standalone net profit of ₹17,616 crore, a year-on-year (YoY) increase of 6.7%, despite facing margin pressures and a challenging credit environment. The results surpassed most analyst expectations and signaled a positive outlook for India’s banking sector.

Key Highlights (Q4 FY25 vs Q4 FY24)

Metric	Q4 FY25	Q4 FY24	YoY Growth
Net Profit	₹17,616 crore	₹16,512 crore	6.7%
Net Interest Income (NII)	₹32,066 crore	₹29,080 crore	10.3%
Net Interest Margin (NIM)	3.54%	3.70% (est.)	Slight Decline
Gross NPA Ratio	1.33%	1.42%	Improved
Loan-to-Deposit Ratio (LDR)	96.5%	104%	Improved
Dividend Announced	₹22/share	₹19/share	15.8% hike

Profitability and Margin Performance

The bank’s net interest income (NII) — the core measure of lending profitability — grew by 10.3% YoY to ₹32,066 crore, backed by steady growth in advances and a broadening retail loan portfolio. However, net interest margins (NIMs) were under slight pressure due to post-merger balance sheet adjustments with erstwhile HDFC Ltd, especially the inclusion of long-tenor, low-yield housing loans.

Despite this, HDFC Bank maintained a healthy NIM of 3.54%, showing resilience in managing asset yields and deposit costs.

Asset Quality and Loan Book

The bank’s gross non-performing asset (GNPA) ratio improved to 1.33%, down from 1.42% in the previous quarter, demonstrating prudent credit management and healthy recovery performance. Net NPA stood at 0.33%, indicating a strong provisioning buffer.

On the credit side, advances grew by ~4% QoQ, while deposits rose 5.9% QoQ, bringing the loan-to-deposit ratio down to 96.5%, compared to 104% a year ago. The bank reiterated its goal of bringing the LDR to pre-merger levels of 85–90% by FY27.

Dividend Announcement

HDFC Bank’s board declared a final dividend of ₹22 per equity share, subject to shareholder approval. The record date for the dividend is set for June 27, 2025. This marks a 15.8% increase from the previous year’s ₹19 per share dividend, underlining the bank’s confidence in future earnings stability.

Post-Merger Synergies & Strategic Outlook

Since its merger with HDFC Ltd in July 2023, HDFC Bank has been focusing on consolidating its retail lending base, expanding branch-level outreach, and enhancing digital banking capabilities. CFO Srinivasan Vaidyanathan mentioned that while corporate lending faces pricing pressures, retail lending offers significant headroom for growth, particularly in home loans, auto loans, and unsecured personal finance.

Looking ahead, the bank is optimistic about growing ahead of the industry average, leveraging post-merger synergies and cross-selling opportunities. It plans to ramp up deposits, optimize borrowing costs, and target a 17–18% RoE in the medium term.