HDB Financial Q1 net dips 2.4% to ₹568 crore on higher credit cost

HDB Financial's Q1FY26 net declines 2.4% YoY due to 62% surge in credit costs; loan book expands 14.3%, secured loans make up 73% of total portfolio

HDB Financial Services, the non-banking finance subsidiary of HDFC Bank, on Tuesday reported a marginal year-on-year (YoY) decline of 2.4 per cent in net profit to ₹568 crore for the quarter ended June 2025 (Q1FY26), owing to a rise in credit costs.

 

Its net interest income (NII) during Q1FY26 rose 18.3 per cent YoY to ₹2,092 crore, while non-interest income increased nearly 8 per cent YoY to ₹330 crore. Meanwhile, credit cost jumped 62.4 per cent YoY to ₹670 crore in Q1FY26, compared to ₹412 crore in the corresponding period last year. In Q4FY25, credit cost stood at ₹634 crore. 

The company reported a net interest margin (NIM) of 7.7 per cent in Q1FY26, up from 7.6 per cent in Q4FY25. 

 

Loan losses and provisions stood at ₹670 crore in Q1FY26, against ₹412 crore in the same period a year ago. Gross non-performing assets (NPAs) at the end of Q1FY26 stood at 2.56 per cent, compared to 1.93 per cent in Q1FY25, while net NPAs were 1.11 per cent, up from 0.77 per cent a year earlier.

 

Additionally, the lender said its customer franchise grew to 20.1 million, up 5 per cent during the quarter and 20.4 per cent YoY.

 

The loan book expanded 14.3 per cent YoY and 2.3 per cent sequentially to ₹1.09 trillion in Q1FY26, with 73 per cent of it comprising secured loans. The lender disbursed ₹15,171 crore in the quarter, down 14 per cent sequentially, but up 8 per cent YoY.