HDFC Bank Q4 FY25 Results: Profit up 6.6%, NIM 3.54%

Result day snapshot

HDFC Bank announced its Q4 FY25 results on April 19, 2025, reporting a year-on-year rise in profit and a stronger net interest margin. The lender posted standalone net profit of ₹17,616 crore, up 6.6% from ₹16,511.85 crore in Q4 FY24. On a consolidated basis, net profit increased 6.8% YoY to ₹18,835 crore versus ₹17,622 crore a year earlier. The results were described as a mild beat versus expectations, with a CNBC-TV18 poll projecting PAT of ₹17,058.1 crore and a Moneycontrol poll projecting ₹17,072 crore. The bank’s board recommended a dividend of ₹22 per share (face value ₹1). The record date for the dividend was set as Friday, June 27, 2025.

Profit growth and what drove it

HDFC Bank’s Q4 profitability was supported by higher core income and materially lower provisions. Net interest income rose 10.3% YoY, reflecting the bank’s core spread business and balance sheet expansion on the liability side. The quarter also benefited from a sharp decline in provisions and contingencies to ₹3,190 crore from ₹13,510 crore in Q4 FY24, when the bank had carried floating provisions of ₹10,900 crore. Core operating profit was reported at ₹26,146.7 crore, up 20.6% YoY in the key highlights section. In another disclosure, operating profit before provisions was cited as down 9.4% YoY to ₹26,537 crore compared with ₹29,274 crore in Q4 FY24, while still improving sequentially.

Net interest income and margin at a seven-quarter high

Net interest income (interest earned less interest expended) grew 10.3% YoY to about ₹32,070 crore (figures across the text range from ₹32,065.8 crore to ₹32,070 crore). NII was also reported at ₹30,650 crore in the preceding quarter. Net interest margin (NIM) came in at 3.54% on total assets and 3.73% based on interest earning assets, described as a seven-quarter high on total assets. Excluding ₹700 crore of interest on an income tax refund, core NIM was 3.46% on total assets and 3.65% on interest earning assets. The NIM improvement was presented as evidence of tighter asset-liability management as the bank works on the post-merger balance sheet.

Net revenue and other income mix

For Q4 FY25, net revenue was reported at ₹44,090 crore, compared with ₹47,240 crore in Q4 FY24. The prior-year quarter included a one-time transaction gain of ₹7,340 crore from a stake sale in subsidiary HDFC Credila Financial Services Ltd, which inflated the base. Other income (non-interest revenue) for Q4 FY25 was ₹12,030 crore, up from ₹11,420 crore in the previous year. Within other income, fees and commissions were ₹8,530 crore (₹7,990 crore in Q4 FY24), foreign exchange and derivatives revenue was ₹1,440 crore (₹1,140 crore in Q4 FY24), trading and mark-to-market gain was ₹390 crore (Q4 FY24 included much larger trading gains due to the Credila transaction), and miscellaneous income including recoveries and dividend was ₹1,670 crore.

Costs and efficiency indicators

Operating expenses for the quarter were reported at ₹17,560 crore, versus ₹17,970 crore in Q4 FY24. Another data point in the text cited operating expenses falling about 10% YoY to approximately ₹43,900 crore, reflecting different presentation lines across sources. The cost-to-income ratio was cited at 39.8% for the quarter, indicating improved operating efficiency in that measure. The bank’s ability to grow deposits while keeping costs controlled was highlighted as a support for profitability amid moderating loan growth.

Deposits growth outpaces advances

The bank reported period-end deposits of ₹27.14 lakh crore (₹27,14,000 crore), up 14.1% YoY from ₹23.79 lakh crore (₹23,79,000 crore). Deposits rose 5.9% sequentially, with the bank adding ₹1.5 lakh crore of deposits during Q4 FY25, described as its highest quarterly deposit gain in FY25. Average deposits for the quarter were ₹25.28 lakh crore, up 15.8% YoY from ₹21.84 lakh crore, and up 3.1% sequentially from ₹24.53 lakh crore. CASA deposits comprised 34.8% of total deposits as of March 31, 2025, with CASA deposits growing 3.9% YoY and time deposits rising 20.3% YoY.

Loan growth and segment trends

Gross advances stood at ₹26.44 lakh crore (₹26,44,000 crore) as of March 31, 2025, up 5.4% YoY. Advances under management grew 7.7% YoY, and average advances under management were approximately ₹25 lakh crore for the quarter, up 7.3% YoY. Segment-wise, retail loans rose 9% YoY and commercial and rural banking loans grew 12.8% YoY. Corporate and wholesale loans declined 3.6% YoY in one set of disclosures, reflecting a cautious stance in large corporate lending. Overseas advances comprised 1.7% of total advances.

Asset quality: mixed YoY, better QoQ

Gross NPA ratio improved on a quarter-on-quarter basis to 1.33% as on March 31, 2025 from 1.42% as on December 31, 2024. However, it was higher than 1.24% a year ago. Net NPA ratio was 0.43% versus 0.46% in the previous quarter and 0.33% in the year-ago period. In absolute terms, gross NPAs were ₹35,222.64 crore at end-March 2025, down from ₹36,018.58 crore at end-December 2024, but up from ₹31,173.32 crore at end-March 2024. The quarter’s lower provisions were reported alongside this asset quality trajectory.

Capital position and balance sheet metrics

The bank’s total Capital Adequacy Ratio (Basel III) was 19.6% as of March 31, 2025, up from 18.8% a year earlier, against a regulatory requirement of 11.7%. Tier 1 CAR stood at 17.7% and Common Equity Tier 1 at 17.2%. Risk-weighted assets were ₹26.60 lakh crore. Management commentary in the text also flagged the credit-deposit (CD) ratio as a key focus post-merger: it declined to 96.5% at end-Q4 FY25 from levels as high as 110% during the merger period, with an stated aim to move toward pre-merger levels (86% to 90%) by FY27.

What brokerages said and why it matters

Brokerages described the quarter as a slight beat on profit, pointing to improving operating leverage and controlled slippages. Motilal Oswal noted business growth was healthy while aligning with the bank’s strategy to reduce the CD ratio consistently, and said the gradual retirement of high-cost borrowings and improved operating leverage could support return ratios over coming years. CLSA termed the quarter “decent” and highlighted that the preceding four quarters were weak, while Q4 showed a pickup in loan growth sequentially and reiterated the intention to grow in-line with the market in FY26. Nuvama Institutional Equities also pointed to deposit market share gains, improving loan-to-deposit metrics, and an uptick in core NIM.

Market reaction and the broader banking read-through

HDFC Bank shares rose in trade on April 21 after the earnings update, with one report noting a rise of about 1.5%. The quarter’s combination of double-digit NII growth, improving quarterly NPA ratios, and strong deposit mobilisation was positioned as a constructive signal for the sector at a time when investors are tracking credit growth trends and asset quality closely. At the same time, the data points also showed moderate advances growth versus deposits, indicating a deliberate balance-sheet approach. The bank’s disclosures and commentary framed FY26 growth as intended to be in line with the industry, while working toward a lower CD ratio over the next two years.

Key numbers at a glance

Conclusion

HDFC Bank’s Q4 FY25 print combined higher profit, faster NII growth, and stronger quarterly margins, alongside a sharp reduction in provisions. Deposit growth remained a standout, outpacing advances growth as the bank continues to recalibrate its post-merger credit-deposit ratio. Asset quality improved sequentially, even as year-on-year NPA ratios were higher, with gross NPAs in absolute terms lower than the previous quarter. Investors will track follow-through on the bank’s stated plan to grow broadly in line with the industry in FY26 and its progress on bringing the CD ratio closer to pre-merger levels by FY27.