HDB Financial Services (HDBFS) Q2 25/26 earnings summary

Executive summary

• Domestic economic activity in India remains resilient, supporting growth despite geopolitical uncertainties.

• Gross loans reached ₹1,11,409 crore as of September 30, 2025, up 1.9% sequentially and 13% year-over-year.

• Net interest income for Q2FY26 was ₹2,192 crore, up 4.8% sequentially and 19.6% year-over-year.

• Customer base grew to 21 million, up 4.2% during the quarter and 19.6% year-over-year.

• Unaudited standalone financial results for the quarter and half year ended September 30, 2025, were approved with an unmodified opinion.

Financial highlights

• Net interest margin for Q2FY26 was 7.9%, up from 7.7% in Q1FY26.

• Cost-to-income ratio improved to 40.7% in Q2FY26 from 42.7% in Q1FY26.

• Profit after tax for Q2FY26 was ₹581 crore, a 1.6% decrease year-over-year.

• Total revenue from operations for Q2 FY26 was Rs.45,454 million, up from Rs.40,068 million in Q2 FY25.

• Gross Stage 3 ratio at 2.81%; Stage 3 provision coverage at 54.73%.

Outlook and guidance

• Management expects positive momentum in book growth with the festive season and recent GST rate cuts.

• Medium-term guidance targets 18%-20% CAGR book growth over three to five years, with credit cost expected to moderate to around 2.2%.

• Proceeds from the IPO are being used to augment the capital base for future business requirements and onward lending.

• Focus remains on expanding in tier-2 and beyond markets, maintaining asset quality, and leveraging digital platforms for growth.