HDFC Bank Shares Contribute 40 Points to Nifty 50’s 350-Point Drop After Q3 Update

HDFC Bank shares were the second-biggest contributors to a 350-point drop in the Nifty 50 on January 6, 2025, with a 2.5% loss. The bank’s Q3 update revealed a 3% year-on-year growth in advances and a 15.8% rise in deposits. Analysts are divided, with Nomura maintaining a neutral stance and Jefferies recommending a “buy” with a target of ₹2,120.

 

CONTENTS:

HDFC Bank deposits soar, advances rise, profit up.

HDFC Bank’s share price dropped

ITC, banks, Vedanta, financials in focus.

HDFC Bank drags Nifty lower, concerns over growth.

 

HDFC Bank Shares Contribute 40 Points to Nifty 50’s 350-Point Drop After Q3 Update

HDFC Bank deposits soar, advances rise, profit up.

HDFC Bank Shares Contribute 40 Points to Nifty 50 HDFC Bank reported a 16% year-on-year increase in its average deposits, reaching Rs 24.52 lakh crore by December 31, 2024, up from Rs 21.17 lakh crore a year earlier. The bank’s average time deposits rose 21.5% to Rs 16.35 lakh crore, reflecting a strong preference for such deposits. Additionally, period-end deposits grew by 15.8% to Rs 25.63 lakh crore.

In terms of advances, the bank’s average advances for Q3 FY25 reached Rs 26.27 lakh crore, showing a 7.6% increase compared to the previous year. Period-end advances also grew by 6.1%, totaling Rs 26.84 lakh crore.

The bank’s average CASA deposits stood at Rs 8.17 lakh crore, marking a 6% rise, while period-end CASA deposits increased by 4.4% to Rs 8.72 lakh crore.

HDFC Bank’s branch network expanded to 9,092 branches and 20,993 ATMs as of September 2024, compared to 7,945 branches and 20,596 ATMs the previous year.

In Q2 FY25, the bank’s standalone net profit grew by 5.29% to Rs 16,820.97 crore, with total income increasing 9.05% to Rs 85,499.64 crore. However, the stock fell by 1.12%, closing at Rs 1,729.70 on the BSE.

 

HDFC Bank’s share price dropped

HDFC Bank Shares Contribute 40 Points to Nifty 50 HDFC Bank’s share price dropped after the bank’s Q3 FY25 business update showed mixed results, with moderate loan growth and strong deposit growth. Gross advances for the quarter increased by 3% year-on-year to ₹2,54,250 crore, while total deposits rose 2.5% quarter-on-quarter and 15.8% year-on-year to ₹2,56,350 crore. However, CASA deposits (current and savings accounts) declined 1.2% QoQ and 4.4% YoY to ₹87,250 crore, and the CASA ratio fell to 34.04%, down from 35.34% in the previous quarter.

The bank’s average advances under management grew by 7.6% YoY and 2.5% QoQ to ₹26,27,600 crore. Analysts noted that the bank’s credit-deposit ratio fell below 100%, signaling slower credit demand compared to deposit inflows. Additionally, the decline in CASA deposits could impact net interest margins in the near term.

Despite positive deposit growth, concerns over subdued loan growth and falling CASA deposits raise questions about the bank’s growth momentum, especially in the current macroeconomic environment. Anshul Jain of Lakshmishree Investment and Securities highlighted the need for a focused strategy to maintain profitability.

Mahesh M Ojha from Hensex Securities recommended a “buy on dip” strategy for HDFC Bank stock, suggesting traders buy shares around ₹1,710 – ₹1,720, with a target price of ₹1,850 – ₹1,900 in the medium term. As of 9:20 AM, HDFC Bank’s shares were trading at ₹1,740.70 on the BSE, down 0.49%.

 

ITC, banks, Vedanta, financials in focus.

HDFC Bank Shares Contribute 40 Points to Nifty 50 Stocks to watch on January 6 include ITC, Vedanta, NTPC Green, Brigade Enterprises, HDFC Bank, and several other bank stocks, which are expected to see market activity.

ITC will trade ex-date for its demerger of ITC Hotels, with shareholders receiving one ITC Hotels share for every 10 ITC shares held.

HDFC Bank reported growth in both gross advances (up 3% YoY to ₹25.42 lakh crore) and deposits (up 16% YoY to ₹25.63 lakh crore). Its assets under management increased by 7.6%, while CASA deposits grew 4.4%.

 

Other banks also reported positive developments:

• Indian Bank saw an 8.3% YoY growth in total business, with deposits up 7.3% and gross advances increasing 9.6%.
• UCO Bank posted a 16.2% YoY growth in advances, while Bandhan Bank reported a 15% increase in loans and advances.
• IDBI Bank’s net advances rose by 18% YoY, while AU Small Finance Bank saw a 5.2% QoQ increase in gross advances.
• Ujjivan Small Finance Bank’s CASA deposits grew 15% YoY.

 

Vedanta reported a steady Q3 FY25 performance, with production increases in aluminium and mined metal output. NTPC Green Energy secured 1,000 MW of capacity at a tariff of ₹2.56 per kWh in a bid with Uttar Pradesh Power Corporation.

Brigade Enterprises signed a deal for a 20-acre land parcel in Bengaluru, and Tata Elxsi partnered with Qualcomm to enhance Software-Defined Vehicle development.

 

In other news:

• Premier Explosives experienced a fire at its Telangana factory, resulting in one fatality and a severe injury.
• Kotak Mahindra Bank’s COO and CTO resigned, effective February 15, 2025.
• ICICI Bank received a GST demand and penalty of ₹100.76 crore from the Maharashtra GST Department.
• DCX Systems secured an export order worth ₹483 crore from Israel’s ELTA Systems for close-in weapon systems.

These developments are likely to impact the stocks today.

 

HDFC Bank drags Nifty lower, concerns over growth.

HDFC Bank Shares Contribute 40 Points to Nifty 50 HDFC Bank shares have become the second-largest contributors to the 350-point drop in the Nifty 50 index on January 6, 2025. The stock was responsible for nearly 40 points of the Nifty’s decline and saw losses of more than 2.5% on Friday.

The bank’s Q3 update showed a 3% year-on-year growth in advances and a 0.9% increase on a sequential basis. However, the bank’s focus on reducing its Credit-Deposit Ratio resulted in a decrease to 99.18% from 111.53% last year. Deposits grew 15.8% YoY and 2.5% QoQ.

Analysts are divided in their outlook on HDFC Bank. Nomura maintains a neutral stance with a target price of ₹1,870, citing soft loan growth and declining CASA deposits. Meanwhile, Jefferies maintains a “buy” rating with a higher target price of ₹2,120, arguing that the current valuations reflect the lender’s soft growth.

Despite a solid performance in 2024, HDFC Bank has seen single-digit returns in three of the last four years. Out of 48 analysts covering the stock, 41 have a “buy” rating, and 7 have a “hold” rating.

As of Monday morning, HDFC Bank shares were trading 1.9% lower at ₹1,716.