HDFC Bank Q2 FY26 results: Net profit jumps 11% to Rs 18,641 crore

HDFC Bank has set up its own factory for some of the emerging technologies, says MD Jagdishan

India’s largest private-sector lender, HDFC Bank, on Saturday reported a 10.8 per cent year-on-year (Y-o-Y) increase in net profit to Rs 18,641 crore for the July–September quarter (Q2FY26), compared with Rs 16,820.97 crore in the same period last year, aided by robust growth in non-interest income.

 

Its net interest income (NII) – the difference between interest earned and interest paid – rose 4.8 per cent Y-o-Y to Rs 31,550 crore in Q2FY26, while non-interest income rose 25 per cent Y-o-Y to Rs 14,350 crore during this period.

 

Its net interest margin (NIM) – a measure of profitability of banks – stood at 3.3 per cent in Q2FY26, compared to 3.5 per cent in the same period a year ago, and 3.4 per cent in the previous quarter.

 

 

Provisions and contingencies of the lender in Q2 stood at Rs 3,500 crore, compared to Rs 2,700 crore in the same period a year ago. The bank’s asset quality improved further, with gross non-performing assets (NPAs) at 1.2 per cent at the end of Q2, as against 1.4 per cent in the previous quarter, and net NPAs stood at 0.4 per cent.

 

The bank’s advances under management grew 9 per cent Y-o-Y and 2 per cent sequentially to Rs 27.94 trillion, with retail assets growing 7.4 per cent Y-o-Y, small and mid-market segment growing 17 per cent Y-o-Y and corporate segment growing 6.4 per cent Y-o-Y.

 

Meanwhile deposits (end of period) grew 12.1 per cent Y-o-Y and 1.4 per cent sequentially to Rs 28.01 trillion.

 

“The triad of the tax benefits, the GST cut, and the interest rate cut seems to be working as we see the economic activity visibly improving across customer and product sectors. In this background, we have an opportunity to activate loan growth, which is what we have started to do from this quarter. We believe that this will sustain and continue, but of course, we have to wait and watch,” said Sashidhar Jagdishan , MD & CEO, HDFC Bank.

 

“The bank had charted a growth trajectory, namely slowing down growth in FY25 so that we could bring down the credit-to-deposit ratio from a high of 110 per cent to 96.5 per cent. We also had a trajectory to grow in line with the system for FY26. We seem to be in line with that particular path, and we believe and expect that we will grow faster than the system growth rate and gain market share in FY27,” Jagdishan said.

 

Meanwhile, Jagdishan highlighted that HDFC Bank has set up its own factory for some of the emerging technologies.

 

“We are undertaking a few lighthouse experiments, which primarily is to re-engineer our processes, reduce our turnaround times, create a wow customer experience, and at the same time have a quantum change in tangible benefits to the organisation to the bottom line over 18 to 24 months”, he said.

 

Commenting on acquisition financing opportunities, Jagdishan said, “I think it is positive for Indian banks and for the corporate customers. Definitely, this is going to be a win-win one in terms of us providing another product offering to our bouquet of services to our customers. The second one is even for the customers because it should reduce the cost of the transaction itself”.