Report on HDFC Q1 result and impact on stock market

HDFC Bank’s share price fell by over 3% in early trading on Friday. The drop came after the bank’s Q1 business update revealed a decrease in both advances and deposits compared to the previous quarter.

As of the end of June 2024, HDFC Bank’s advances were ₹24.87 lakh crore, down 0.8% from ₹25.1 lakh crore at the end of March 2024. This decline was mainly due to the bank reducing its low-yielding corporate loans, including those from the former HDFC Ltd.

However, HDFC Bank’s advances grew 52.6% year-on-year, reaching ₹24.87 lakh crore from ₹16.30 lakh crore.

In Q1FY25, deposits were ₹23.79 lakh crore, up 24.4% from ₹19.13 lakh crore a year ago. Deposits remained almost unchanged from ₹23.80 lakh crore at the end of March 2024.

Excluding the impact of the July 2023 merger, the bank’s deposits grew by 16.5% compared to June 30, 2023, according to a regulatory filing.

HDFC Bank’s low-cost deposits current and savings accounts (CASA) ratio as a proportion of total deposits fell to 36.3% at the end of June 2024 from 38.2% at the end of March 2024.

CASA deposits as of June 30 increased 6.2% to ₹8,63,500 crore from ₹8,13,000 crore, YoY, while it declined nearly 5% from ₹9,08,800 crore, QoQ.

The liquidity coverage ratio in Q1 improved to 123% compared to 115% in the previous quarter.

This week, HDFC Bank’s share price hit a record high of ₹1,791.90 apiece on the BSE.

The latest shareholding pattern of HDFC Bank shows the ownership of foreign institutional investors (FIIs) in the bank dropped below 55%, which is expected to lead to an increase in HDFC Bank stock’s weightage in the MSCI index, leading to higher passive inflows.

At 12:30 pm, HDFC Bank shares were trading 4.29% lower at ₹1,653.50 apiece on the NSE.

HDFC Bank has a weightage of over 29.04% in bank nifty. It contributed a major part to today’s bank nifty fall.

-By

Vishal Kumar K R