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HDFC Bank's recent Q4 FY25 results have triggered a positive response in the stock market, leading to a noticeable increase in the bank's share price. The surge, witnessed at the opening bell on Monday, April 21st, 2025, saw the share price climb over 2%, reaching a new all-time high of ₹1,950 on the BSE. While the initial momentum slightly cooled down by noon, the shares were still trading at a healthy 1.06% increase, settling at ₹1,927.20. This positive movement reflects investor confidence in HDFC Bank's financial performance and strategic direction. The impressive Q4 results, highlighted by a net profit of ₹17,616 crore, a year-on-year (YoY) growth of 6.7%, played a crucial role in boosting market sentiment. Furthermore, the bank's net interest income (NII) experienced a substantial increase of 10.3% YoY, reaching ₹32,070 crore, indicating strong core banking performance. The net interest margin (NIM) also remained healthy at 3.54% on total assets and 3.73% based on interest-earning assets, signaling efficient asset management and profitability. Analyzing the asset quality, HDFC Bank demonstrated sequential improvement, with gross non-performing assets (GNPAs) at 1.33% as of March 31, 2025, a decrease from 1.42% in the December 2024 quarter. While the GNPA figure is slightly higher than the 1.24% recorded in the previous year, the sequential improvement indicates effective management of non-performing assets. Net NPAs were reported at 0.43% of net advances, further solidifying the bank's asset quality. In addition to the robust financial performance, the board of HDFC Bank recommended a dividend of ₹22 per share for FY25, a move that is likely to further attract investors and enhance shareholder value. This dividend announcement underscores the bank's commitment to rewarding its shareholders and sharing its success. The positive reaction from analysts further validates HDFC Bank's strong Q4 performance. Several brokerages have revised their target prices for the stock upwards, reflecting increased confidence in the bank's future prospects. Anand Dama from Emkay Global Financial Services highlighted the bank's better credit growth and stable core margins, anticipating that HDFC Bank will benefit from easing regulatory stances. Emkay Global retained a 'Buy' rating and raised the target price by 5% to ₹2,200. Nuvama Institutional Equities also reported strong Q4FY25 earnings, emphasizing the beat on core NIM and lower QoQ slippage. They reiterated their 'Buy' rating and increased the target price to ₹2,195 from ₹1,950. These revised target prices indicate the analysts' belief that HDFC Bank's stock has further upside potential. However, despite the overwhelmingly positive sentiment, some analysts have cautioned against excessive optimism. Anshul Jain, Head of Research at Lakshmishree Investment, suggested that the stock now appears overextended and a profit booking move towards the ₹1,850- ₹1,860 zone is highly likely. He noted that HDFC Bank shares are trading well above their key Exponential Moving Averages (EMAs) and advised investors holding momentum longs to consider booking partial profits, suggesting a pullback would offer a better risk-reward for re-entry. This cautionary note highlights the importance of considering both technical indicators and fundamental analysis when making investment decisions. The historical stock performance of HDFC Bank has been impressive, demonstrating consistent growth over various timeframes. The stock has gained 10% in one month and over 18% in three months. Over the past year, the shares have risen by 27%, and they have delivered a multibagger return of 110% in the last five years. This strong historical performance further reinforces the bank's reputation as a reliable and rewarding investment. At present, the bank’s share price is trading at ₹1,927.20, reflecting the positive impact of the Q4 results and the overall market sentiment. In conclusion, HDFC Bank's strong Q4 FY25 results have led to a surge in its share price, driven by positive analyst reactions and investor confidence. While the long-term outlook for the bank remains optimistic, investors should exercise caution and consider potential profit booking opportunities in the short term.
Source: HDFC Bank Stock Price Increase by 2% After Strong Q4 Results