HDB Financial Services reported its highest ever quarterly Profit After Tax of ₹785 crore for the quarter ended June 30, 2026, a growth of 38.3% year-on-year. The non-deposit taking NBFC recorded robust operational performance, with net interest income rising 19.9% to ₹2,509 crore and pre-provisioning operating profit increasing 24.3% to ₹1,726 crore. Asset quality improved sequentially, with Gross Stage 3 assets at 2.34% compared to 2.44% in the previous quarter. The net interest margin improved to 8.35% from 7.74% in the corresponding quarter of the previous year.

Financial Performance

The company's net total income for Q1 FY27 stood at ₹3,185 crore, an increase of 16.8% compared to ₹2,726 crore in the same period last year. Profit before tax grew 44.0% YoY to ₹1,055 crore. Loan losses and provisions for the quarter were ₹697 crore, up 4.1% YoY. The cost to income ratio for the lending business was 39.9% in Q1 FY27 compared to 42.7% in Q1 FY26. The credit cost for the quarter was 2.32% as against 2.35% for the previous quarter.

Asset Quality and Provisions

HDB Financial Services continued to strengthen its asset quality metrics. Gross Stage 3 loans stood at 2.34% as against 2.56% as at June 30, 2025, while Net Stage 3 loans improved to 1.04% from 1.09% in the previous quarter and 1.11% in the same period last year. The provision coverage ratio on stage 3 assets was 55.73%, compared to 56.70% a year ago.

Key Metrics and Ratios

The following table summarizes the key financial and operational metrics for the quarter:

Business Segments and Distribution

The lender operates through three primary business lines: Enterprise Lending, Asset Finance, and Consumer Finance. As of June 30, 2026, the Enterprise Lending mix was 38%, Asset Finance was 37%, and Consumer Finance was 25%. Secured gross loans accounted for 73.9% of the mix. The company serves customers through a network of 1,710 branches spread across 1,165 cities and towns.

Management Guidance: Concall Update

Management stated that a credit cost of 2.3% represents their steady-state expectation. The company's stated focus is to maintain Net Interest Margin at 8% and above, and to deliver a Return on Asset of 2.5% on a consistent basis. Management anticipates the upward trajectory of their LAP plus EBL mortgage book to continue and expects positive momentum in Enterprise Lending. Sustained demand is expected to drive continued momentum in the Consumer Finance segment. Management highlighted key monitorables that could impact asset quality and credit costs, including supply chain challenges stemming from the West Asia conflict and El Niño-related risks, particularly regarding monsoons.

Earnings Call Update

Pursuant to Regulation 30 and 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the transcript of the earnings call held on July 15, 2026, regarding the unaudited financial results for the quarter ended June 30, 2026, has been made available on the company website.

HDB Financial Services has announced that its board of directors is scheduled to convene on July 23 to consider fund raising. The announcement signals a potential capital mobilization initiative by the company, with the board set to deliberate on the matter at the upcoming meeting.

Board Meeting Details

The following key details have been disclosed regarding the upcoming board meeting:

Key Highlights

• The board of HDB Financial Services is set to meet on July 23.
• The primary agenda of the meeting is to consider fund raising.
• Further details regarding the nature, quantum, or instrument of the proposed fund raise have not been disclosed at this stage.

The specifics of the fund raising — including the type of instrument, size, or intended use of proceeds — are yet to be announced. Stakeholders and market participants are expected to await the outcome of the July 23 board meeting for further clarity on the company's capital plans.