Is HDFC Bank Stock a Good Buy After Q3 Update?

 

HDFC Bank's share price dropped on Monday following the release of its Q3 business update for FY25. The update showed moderate growth in gross advances and strong deposit growth.

 

In the December quarter, the bank's gross advances grew 3% year-on-year (YoY) to ₹2.54 lakh crore, with a 0.9% sequential rise. Total deposits rose by 2.5% QoQ and 15.8% YoY, reaching ₹2.56 lakh crore. However, CASA (Current and Savings Account) deposits saw a decline, dropping 1.2% QoQ and 4.4% YoY to ₹87,250 crore, impacting the bank's CASA ratio, which decreased to 34.04% from 35.34% in the previous quarter.

 

Despite positive deposit growth, analysts note a slowdown in loan growth and declining CASA, which could affect the bank's net interest margins. The Credit-Deposit ratio slipping below 100% raises concerns about slower credit demand compared to deposits.

 

HDFC Bank also received approval from the RBI to acquire stakes in Kotak Mahindra Bank, AU Small Finance Bank, and Capital Small Finance Bank.

 

Should you invest in HDFC Bank now?

Analyst Mahesh M Ojha suggests a "buy on dip" strategy for the stock, recommending investors buy around ₹1,710–1,720, with a stop-loss at ₹1,668 and a target price of ₹1,850–1,900 for the medium term.

 

At 9:20 AM, HDFC Bank's shares were trading at ₹1,740.70, down 0.49% on the BSE.