HDB Financial Q1 Results: Profit jumps 38% YoY to Rs 785 crore; NII up 20%

HDB Financial Services on Wednesday reported a 38% year-on-year (YoY) rise in profit after tax for the June quarter, helped by strong growth in net interest income and lower pressure from asset quality. The non-bank lender posted a profit after tax of Rs 785 crore for the quarter ended June 2026, compared with Rs 568 crore in the same period last year.

Net interest income rose 20% to Rs 2,509 crore from Rs 2,092 crore a year earlier. Net total income increased 17% to Rs 3,185 crore from Rs 2,726 crore in the year-ago quarter.

Pre-provisioning operating profit grew 25% YoY to Rs 1,752 crore, compared with Rs 1,402 crore in the corresponding quarter last year. The company’s profit before tax rose 44% to Rs 1,055 crore from Rs 733 crore a year earlier.

HDB Financial’s assets under management (AUM) stood at Rs 1.22 lakh crore as of June 2026, compared with Rs 1.09 lakh crore a year earlier, marking growth of 11%. The gross loan book stood at Rs 1.21 lakh crore, up 11% from Rs 1.09 lakh crore as of June 2025.

The growth in AUM and loan book shows steady expansion in the company’s lending business, even as the NBFC sector continues to balance growth with asset quality.

Asset quality improves

Asset quality improved from last year. Gross Stage 3 loans stood at 2.34% at the end of the June quarter, compared with 2.56% a year earlier. Net Stage 3 loans declined to 1.04% from 1.11% in the same period last year.
Loan losses and provisions rose only 4% YoY to Rs 697 crore, compared with Rs 670 crore in the year-ago quarter. The slower rise in provisions helped support profit growth during the quarter.Provision coverage on Stage 3 assets stood at 55.73%, compared with 56.70% as of June 2025.

HDB Financial delivered healthy growth across core operating metrics. NII growth of nearly 20% was ahead of loan book growth, indicating support from yields and interest income. The company also saw operating leverage, with pre-provisioning profit growing faster than income. This helped profit before tax rise 44% despite a modest increase in provisions.

The improvement in Stage 3 loans will be watched closely by investors, especially after the company’s listing. For lenders, asset quality remains a key factor in valuations, along with loan growth, margins and credit costs.

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