HDFC Bank (HDFCBANK) Q3 25/26 earnings summary

Executive summary

• Credit and deposit growth were strong, with advances up 19.0% YoY and deposits up 12.2% YoY, supported by an easing rate cycle and CRR release, while asset quality remained robust at decadal lows.

• Profit after tax for the quarter reached ₹187 bn, with EPS at 12.1 and RoA at 1.92%.

• Capital adequacy was healthy at 19.9%, with CET1 at 17.4%.

• Branch productivity and expansion supported deposit mobilization, with young branches contributing over 20% of incremental deposits.

• Consolidated profit after tax for the quarter was ₹198.1 billion, up 12.2% year-over-year.

Financial highlights

• Net interest income grew 6.4% YoY to ₹326.2 bn, with net revenue up 9.0% YoY to ₹458.7 bn and non-interest income up 15.7% YoY to ₹132.5 bn.

• Operating expenses for the quarter were ₹179.7 bn, with a core cost-to-income ratio of 39.2%.

• Cost of funds declined by 10-11 basis points sequentially, reflecting improved funding mix and rate discipline.

• Credit costs, net of recoveries, stood at approximately 37 basis points, stable year-over-year.

• LCR reported at 116% for the quarter.

Outlook and guidance

• Loan-to-deposit ratio (LDR) is expected to trend downward, targeting 90-96% in FY26 and 85-90% by FY27, contingent on deposit growth and liquidity conditions.

• Loan growth is guided to be 2-3 percentage points above the expected system growth of 12-13% for the next year.

• Margins are expected to improve over the next 2-3 years as cost of funds continue to decline and CASA growth is prioritized.

• Continued focus on expanding branch network and customer base, with 9,616 branches and 21% YoY customer growth.

• ESG initiatives target carbon neutrality by FY32 and increased sustainable finance portfolio.