HDFC Bank Q1 results: Net profit jumps 12.24% YoY at ₹18,155 crore; special interim dividend, bonus shares approved

Strong Financial Performance in Q1 FY25

HDFC Bank reported a 12.24% year-on-year (YoY) jump in standalone net profit to ₹18,155 crore for the quarter ended June 30, 2025 (Q1FY25), up from ₹16,811 crore in the same period last year. The performance was driven by healthy growth in net interest income (NII) and improvement in loan disbursements post-merger with parent company HDFC Ltd.

The bank’s net interest income rose 4.6% YoY to ₹29,471 crore in Q1FY25, up from ₹28,615 crore in Q1FY24, reflecting steady credit growth and strong asset quality.

Bonus Shares and Special Interim Dividend Announced

In a move to reward shareholders, the bank's board approved the issuance of bonus shares in the ratio of 1:1—one bonus share for every one held. Additionally, it declared a special interim dividend of ₹15 per equity share of face value ₹1 each.

The record date for both the bonus issue and the interim dividend has been set as July 25, 2025. These announcements have been well received by investors and are expected to improve liquidity and broaden retail participation in the stock.

Post-Merger Synergies Reflecting in Growth

Since the historic merger with HDFC Ltd in July 2023, HDFC Bank has undergone a transformational integration, now housing both banking and housing finance under one umbrella. The merged entity's total advances grew 21.1% YoY to ₹25.2 lakh crore, while total deposits stood at ₹23.8 lakh crore, registering a growth of 18.5% YoY.

The loan-to-deposit ratio (LDR) has remained healthy, ensuring adequate liquidity for expansion.

Asset Quality Remains Stable

The bank has maintained its stellar asset quality despite volatile economic conditions. Gross non-performing assets (GNPAs) stood at 1.18%, improving from 1.23% in the year-ago quarter. Net NPAs were at 0.29%, reflecting prudent underwriting practices and robust credit monitoring.

Provisioning coverage ratio (PCR) stood at 75%, further fortifying the bank’s balance sheet against potential stress in asset quality.

Management Commentary

Commenting on the results, Sashidhar Jagdishan, Managing Director & CEO of HDFC Bank, said:

“This quarter marks the first full year of operations post the merger. We are pleased with the synergies emerging across products and customer segments. The bonus issue and dividend reflect our strong capital position and commitment to delivering shareholder value.”

He also noted that the integration with HDFC Ltd is largely complete and the bank is now focused on cross-selling housing loans and expanding its footprint in semi-urban and rural regions.

Market Reaction and Analyst Views

Following the Q1 results announcement, HDFC Bank shares surged 2.3% intraday to touch ₹1,792 on the NSE, before closing at ₹1,774, reflecting positive investor sentiment.

Ravi Singh, Market Strategist at GCL Broking, said:

“HDFC Bank’s numbers beat street expectations on net profit and profitability metrics. The bonus issue and special dividend will further enhance stock attractiveness in the near term, especially among retail investors.”

Motilal Oswal Financial Services in its note stated:

“Strong credit growth and lower slippages indicate stable operations post-merger. With robust capital buffers and improving margins, HDFC Bank is well placed to sustain earnings momentum.”

Investor Outlook

With consistent earnings growth, strong fundamentals, and attractive shareholder returns, HDFC Bank continues to be a favorite among long-term investors. Analysts remain bullish on the bank’s medium- to long-term prospects.

Looking ahead, the focus will remain on:

• Leveraging cross-sell opportunities post-merger

• Maintaining cost-to-income efficiency

• Expanding credit in retail and MSME sectors

• Growing housing finance penetration in Tier 2 and Tier 3 cities

Despite a competitive banking landscape and global macro uncertainties, HDFC Bank's digital capabilities, robust capital base, and diversified product mix provide a strong foundation for future growth.