HDFC Bank Q2 Results Review - Systematix Retains 'Buy' Rating On The Stock; Here's Why

Systematix Research Report

HDFCB Bank Ltd. reported Q2 FY25 earnings of Rs 168 billion (+4% QoQ, +5% YoY) supported by higher other income and controlled opex growth.

Going into the results expectations were of margin improvement given the asset sales of lower yielding portfolios. However, margins declined slightly (-1bp QoQ) due to higher liquidity from the asset sales, the benefit of which will be in the next quarter.

Two key positive surprises from the results:

1. management guided for an accelerated push for credit-deposit ratio alignment to pre-merger levels of 86-89% (versus 101% as of Sep’24) in two-three years versus four-five yrs timeframe earlier and

2. asset quality in unsecured credit remains intact versus key peers witnessing a deterioration.

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