HDFC Bank Q2 Results Review - LDR Aspects Still Portend A Long Walk To Freedom: Yes Securities

Yes Securities Report

Balance sheet growth – Management reiterated that they would be able to bring down LDR faster than anticipated and provided a glide path for loan growth enhancement:

Earlier, HDFC Bank Ltd. had thought it would take four-five years for LDR to go down to previous levels. However, given that credit growth in the system is poised to decline after two years of elevated levels, the bank will be able to reduce LDR to prior levels over two-three years.

The bank clarified that they would grow below system growth this year, match it in FY26 and then outpace it in FY27. As of Q2, the gross advances growth continued to be tepid at 7.0% YoY while deposits growth far outpaced the same at 15.1% YoY.

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