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

Executive summary

• Domestic economic activity in India remains resilient, supporting financial sector growth, with positive GDP and inflation outlooks.

• 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 by auditors.

Financial highlights

• Net interest margin for Q2FY26 was 7.9%, up from 7.7% in Q1FY26 and 7.5% in Q2FY25.

• Profit after tax for Q2FY26 was ₹581 crore, compared to ₹568 crore in the prior quarter and a 1.6% decrease year-over-year.

• Cost-to-income ratio improved to 40.7% in Q2FY26 from 42.7% in Q1FY26 and Q2FY25.

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

• Gross loan book stood at INR 111,409 crore, growing 1.9% sequentially and 13% year-on-year.

Outlook and guidance

• Positive momentum expected in book growth with festive season and GST rate cuts reducing vehicle ownership costs.

• Management targets 18%-20% CAGR book growth over the medium term, contingent on continued GDP growth.

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

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

• Credit cost is expected to moderate from the current elevated level of 2.7% towards a target range of ±2.2% over the next few quarters.