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While headline earnings are expected to remain stable in the December quarter, investor attention will be firmly on HDFC Bank’s balance sheet dynamics, particularly the elevated loan-to-deposit ratio and management’s roadmap to restore funding comfort without compromising growth momentum.
HDFC Bank is scheduled to announce its earnings for the quarter ended December 2025 (Q3FY26) on Saturday, January 17. The Street is pencilling in a steady set of numbers, though concerns around the bank’s elevated loan-to-deposit ratio (LDR) remain in sharp focus.
The lender has already disclosed advances and deposit growth figures as part of its Q3 business update. While growth trends were largely in line with expectations, investor sentiment turned cautious after the LDR crossed the 99% mark. This is significant, as the management had earlier guided towards bringing the ratio below 90% over time, raising questions around balance sheet flexibility and future growth.
On the earnings front, analysts are expecting around 7% year-on-year growth in both net interest income (NII) and profit after tax (PAT) for the quarter. Pre-provision operating profit (PPoP) growth could be relatively stronger, at close to 9%, aided by support from the other income segment.
Net interest margins (NIMs) are also likely to improve modestly. The Street expects a six-basis-point expansion on a year-on-year basis, taking margins to around 3.46%. This improvement is largely attributed to the recent CRR cut and ongoing deposit repricing across the banking system.
Credit costs are expected to remain stable during the quarter. However, market participants will closely track trends in agricultural loan slippages and any management commentary on asset quality in the agri portfolio.
Beyond the headline numbers, management commentary is expected to be the key driver for the stock. The trajectory for the LDR and clarity on how the bank plans to bring it down will be closely scrutinised, given concerns around growth sustainability. Guidance on loan growth and the outlook for net interest margins will also be critical.
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Overall, while concerns around the balance sheet persist, the Street is expecting HDFC Bank to deliver another stable set of earnings for the December quarter.
Ahead of the results, shares of HDFC Bank ended Friday’s trading session 0.55% higher at ₹930.55 apiece. The Mumbai-headquartered lender currently commands a market capitalisation of ₹7.12 lakh crore and has delivered returns of around 12.65% over the past one year.
