HDFC Bank Q3FY26 Preview: Street Eyes Stable Earnings Amid LDR Concerns

HDFC Bank is expected to announce its results for the quarter ended December 2025 (Q3FY26) on Saturday, January 17. The Street reports a stable set of figures, although concerns over the bank’s high loan-to-deposit ratio (LDR) remain in focus.

The lender has already disclosed advance and deposit growth figures as part of its third quarter trading update. Although growth trends were largely in line with expectations, investor sentiment turned cautious after the LDR crossed the 99% mark. This is important, as management had previously aimed to bring the ratio below 90% over time, raising questions about balance sheet flexibility and future growth.

On the earnings front, analysts expect around 7% year-on-year growth in net interest income (NII) and profit after tax (PAT) for the quarter. Operating profit before provisions (PPoP) growth could be relatively stronger at nearly 9%, aided by support from the other income segment.

Net interest margins (NIMs) are also expected to improve slightly. The Street expects a six basis point expansion year-over-year, bringing margins to around 3.46%. This improvement is largely attributed to the recent reduction in CRR and the ongoing revaluation of deposits across the banking system.
Credit costs are expected to remain stable during the quarter. However, market participants will closely monitor trends in agricultural loan slippages and any comments from management on the asset quality of the agricultural portfolio.

Beyond the big numbers, management commentary should be the main driver of the stock. The trajectory of the LDR and clarity on how the bank plans to reduce it will be closely scrutinized, given concerns over the sustainability of growth. Guidance on loan growth and the outlook for net interest margins will also be key.

Read also | HDFC Bank shares to rebound in FY27, says CLSA, forecasting 28% rise

Overall, even as balance sheet concerns persist, Street expects HDFC Bank to deliver another set of stable earnings for the December quarter.

Ahead of the results, shares of HDFC Bank ended Friday’s trading session up 0.55 per cent at ₹930.55 apiece. The Mumbai-based lender currently has a market capitalization of ₹7.12 lakh crore and has generated returns of around 12.65% over the past year.