This article first appeared on GuruFocus .
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Customer Franchise:Grew to 23.9 million, an increase of 18.6% year-on-year and 4.1% sequentially.
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Disbursements:Rs 17,629 crores, up 16.2% year-on-year.
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Gross Loan Book:Rs 1,21,846 crores, growing 11.3% year-on-year and 2.8% sequentially.
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Profit After Tax:Rs 785 crores, an increase of 38.3% year-on-year and 4.6% quarter-on-quarter.
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Net Interest Income:Rs 2,509 crores, an increase of 19.9% year-on-year and 4.6% quarter-on-quarter.
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Net Interest Margin:8.35% in Q1 FY27 versus 7.74% in Q1 FY26.
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Cost-to-Income Ratio:39.9% in Q1 FY27, compared to 42.7% in Q1 FY26.
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Pre-Provisioning Operating Profit (PPOP):Rs 1,726 crores, an increase of 24.3% year-on-year.
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Credit Cost:2.32% for the quarter.
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Return on Assets (Annualized):2.5% for the quarter ended June 30, 2026.
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Earnings Per Share:Rs 9.5 for the quarter ended June 30, 2026.
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Book Value Per Share:Rs 256.7.
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Total CRAR:21.29% as of June 30, 2026.
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Release Date: July 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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HDB Financial Services Ltd ( NSE:HDBFS ) reported a 38% year-on-year increase in profit after tax, marking its highest ever quarterly profit.
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The company's customer franchise expanded by 19% year-on-year to 23.9 million, indicating strong customer acquisition.
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Net interest income for the quarter increased by 19.9% year-on-year, reflecting improved financial performance.
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The consumer finance segment showed robust growth, with the book growing by 21% year-on-year, driven by strong demand for consumer durables and auto loans.
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HDB Financial Services Ltd ( NSE:HDBFS ) received a strong ESG rating from CRISIL, highlighting its commitment to sustainable business practices.
Negative Points
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Real GDP growth expectations have moderated to 6.6% for FY27, indicating a potential slowdown in economic growth.
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Inflation projections have increased to 5.1%, driven by supply-side pressures, which could impact consumer purchasing power.
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Supply chain challenges from the West Asia conflict and El Nino-related risks remain key concerns for the company.
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The asset finance segment showed modest growth, with commercial vehicle and construction equipment books growing by only 10.1% and 8% year-on-year, respectively.
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The unsecured business loans segment is still in the early stages of recovery, with disbursements only starting to accelerate in the latter part of the quarter.
Q & A Highlights
Q: What is the outlook on asset financing, and why is this segment taking longer to recover? A: Jaykumar Shah, CFO, explained that the asset finance segment is being carefully built up, focusing on specific products. Growth is expected to start showing in the coming quarters as the groundwork has been laid. The segment should see improvement from July onwards.
Q: How is the asset quality in the asset finance segment, and what are the expectations for improvement? A: Jaykumar Shah noted that asset quality has been improving, with Stage 3 assets showing slight improvement. The company is optimistic about further improvements, given the actions taken over the past few quarters.
Q: What is the guidance on credit costs for the full year FY27? A: Jaykumar Shah stated that the company expects credit costs to be around 2.3% for the year. This is a steady-state expectation, and while economic conditions could lead to lower costs, the focus remains on growth.
Q: Can you elaborate on the work done in the asset finance segment and the strength in consumer finance? A: Ramesh Ganesan, CEO, explained that the company has focused on aligning product offerings with customer lifecycle needs. Consumer finance has seen strong growth due to extensive distribution and partnerships with manufacturers. Asset finance has been restructured to focus on products with better risk-adjusted returns.
Q: How has the company managed to maintain strong asset quality despite external challenges? A: Jaykumar Shah highlighted that granular actions and AI-driven initiatives in collections have helped maintain asset quality. The company has been proactive in addressing potential risks, such as the West Asia conflict and monsoon impacts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
