HDB Financial's Q2 profit dips 1.6% to Rs 581 crore on higher provisions

The NBFC's Q2 net profit stood at Rs 581 crore; NII grew nearly 20% while credit cost surged 74% YoY amid rise in NPAs

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HDB Financial Services Ltd (HFSL), a subsidiary of HDFC Bank, reported a 1.6 per cent year-on-year (YoY) decline in net profit to Rs 581 crore for the second quarter ended September 2025 (Q2 FY26), as provisions for stressed loans rose sharply. Sequentially, net profit was up 2.4 per cent from Rs 568 crore in the first quarter ended June 2025.

 

The company’s Net Interest Income (NII) rose 19.6 per cent YoY to Rs 2,192 crore in Q2 FY26 from Rs 1,833 crore a year earlier, and 4.8 per cent sequentially from Rs 2,092 crore in Q1 FY26. Net Interest Margins (NIMs) improved to 7.9 per cent in September 2025, compared with 7.5 per cent a year ago and 7.7 per cent in the previous quarter, according to an analyst presentation.

 

Non-interest income grew 20.6 per cent YoY to Rs 339 crore and 2.6 per cent sequentially over Q1 FY26. HDB’s stock closed 0.46 per cent higher at Rs 743.35 per share on the Bombay Stock Exchange (BSE).

 

Credit costs, or provisions for stressed assets, rose 73.6 per cent YoY to Rs 748 crore, and 11.7 per cent sequentially from Rs 670 crore in Q1 FY26. The company’s gross stage-three assets (NPAs) increased to 2.81 per cent in Q2 FY26, from 2.1 per cent a year earlier and 2.56 per cent in June 2025.

 

Gross loans rose 13 per cent YoY to Rs 1.11 trillion as of September 30, 2025. The company’s capital adequacy ratio stood at a comfortable 21.82 per cent, with Tier I capital at 17.26 per cent as of September 2025.