HDFC Bank: High-Growth Non-Tech Stock in 2025?

In the ever-evolving landscape of the financial sector, HDFC Bank Limited (NYSE:HDB) has emerged as a beacon of stability and growth. As we delve into the intricacies of this banking giant, one question looms large: Is HDFC Bank a high-growth non-tech stock that is profitable in 2025? Let's break down the key factors that make HDFC Bank a compelling investment opportunity.

Deposit Growth: The Backbone of Financial Stability

One of the most critical indicators of a bank's health is its deposit growth. HDFC Bank has consistently demonstrated robust performance in this area. As of the second quarter of 2025, the bank's retail branches contributed a staggering 84% of the total deposits, with a year-on-year growth of 15%. This growth is significantly higher than the system-level deposit growth of 9.8%, highlighting HDFC Bank's dominance in the Indian banking sector.



Advances Under Management: Steady Loan Growth

Another key driver of HDFC Bank's profitability is its advances under management. The bank has achieved a year-on-year growth of 10.2% in this area, indicating steady loan growth. This growth in advances contributes to the bank's revenue and profitability, making it a reliable source of income.

Net Interest Margin (NIM): The Stability Factor

HDFC Bank's Net Interest Margin (NIM) has remained stable at 3.46%. This stability is crucial for maintaining earnings growth and return on equity (ROE). A stable NIM ensures that the bank's earnings are predictable and consistent, which is essential for long-term financial planning and investor confidence.



Gross Non-Performing Assets (NPA): Effective Risk Management

HDFC Bank has managed to keep its gross NPA percentage low at 1.4%, indicating effective risk management. A low NPA ratio ensures the bank's financial stability and maintains investor confidence, making it a safe bet for investors.

Profit After Tax: A Reflection of Strong Financial Performance

HDFC Bank achieved a nine percent point increase in profit after tax from the previous year, reaching INR 16,800 crores. This growth in profit after tax reflects the bank's strong financial performance and growth prospects, making it an attractive investment opportunity.

Valuation Metrics: A Mixed Bag

While HDFC Bank's financial performance is impressive, its valuation metrics tell a different story. The bank's current P/E ratio of 19.80 is slightly higher than its historical average of 19.66 and higher than its peers. However, the bank's P/S ratio, P/B ratio, and EV/Revenue ratio are in line with its historical averages and higher than its peers, indicating a relatively overvalued stock compared to its historical averages and industry peers.

Conclusion: A High-Growth Non-Tech Stock?

In conclusion, HDFC Bank Limited (NYSE:HDB) has demonstrated strong growth drivers, consistent financial performance, and a relatively high valuation compared to its historical averages and industry peers. While the bank's deposit growth, advances under management, stable NIM, low NPA, and increased profit after tax indicate a positive outlook, the bank's relatively high P/E ratio suggests that the stock might be overvalued compared to its historical averages and industry peers. Investors should carefully consider the bank's growth prospects, earnings quality, and market conditions before making a final determination on whether HDB is the high-growth financial stock to invest in.