HDB Financial Q1FY26 Result: Revenue and AUM Posted Double-Digit Growth

On July 15, 2025, HDB Financial Shares are in focus as the company has released its first earnings after listing on the stock exchange. HDB Financial demonstrated consistent growth in key financial metrics despite macroeconomic challenges, supported by a robust lending portfolio and continued operational efficiency.

Strong Growth in Loan Book and AUM

The company’s Assets Under Management (AUM) rose to ₹1,09,690 crore as of June 30, 2025, registering a healthy 14.7% year-on-year increase from ₹95,643 crore. This growth reflects HDB’s strategic focus on expanding its customer base and deepening its presence across segments. Similarly, total gross loans surged to ₹1,09,342 crore, a 14.3% increase compared to ₹95,629 crore in the same period last year, underscoring the strength of its credit portfolio.

Solid Growth in Income and Operating Profit

HDB reported strong growth in its core income metrics. Net interest income for the quarter reached ₹2,092 crore, an 18.3% jump from ₹1,768 crore a year earlier, driven by higher loan disbursements and improved yields. Net total income stood at ₹2,726 crore, up 14.2% from ₹2,387 crore in Q1FY25, showcasing continued momentum across revenue streams. The company also delivered a solid pre-provision operating profit (PPOP) of ₹1,402 crore, reflecting a 17.2% increase from ₹1,196 crore, highlighting operational efficiency and revenue traction.

Profitability Margins Impacted by Higher Provisions

Despite strong revenue growth, profitability was impacted by an increase in provisioning. Loan losses and provisions for the quarter stood at ₹670 crore, a notable rise from ₹412 crore in the year-ago period. As a result, profit before tax (PBT) declined to ₹733 crore, compared to ₹784 crore in Q1FY25. Consequently, profit after tax (PAT) stood at ₹568 crore, marginally lower than ₹582 crore in the same quarter last year. The increase in provisions indicates a cautious stance on asset quality in response to emerging credit risks.

Also Read: HCL Tech Q1FY26 Earnings: Revenue Grew Slightly and Profit Slipped Over 3% YoY

Asset Quality Update

HDB reported a moderate deterioration in asset quality. Gross Stage 3 loans rose to 2.56% as of June 30, 2025, compared to 1.93% a year earlier, while Net Stage 3 loans increased to 1.11% from 0.77% over the same period. The provisioning coverage ratio (PCR) on Stage 3 assets stood at 56.70%, down from 60.24% in the previous year. This shift reflects a more conservative approach towards potential credit losses, amid a changing risk environment and evolving borrower profiles.

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