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HDB Financial Services: Profits Slip 1.5%, But Revenue Surges 13%

HDB Financial Services experienced a slight dip in Q2 net profit while maintaining strong revenue growth. The company's performance was marked by a 13% increase in overall revenue, despite a 1.5% decline in net profit. Loan losses and provisions significantly increased, impacting the bottom line. The NBFC remains a key subsidiary of HDFC Bank, offering diverse loan products to individuals and businesses.

Key Points: HDB Financial Services Q2 Profit Decline Amid Revenue Growth

  • Q2 net profit declines 1.5% to Rs 581 crore
  • Revenue increases 13% to Rs 4,545 crore
  • Loan losses and provisions rise 74% to Rs 748 crore
  • Interim dividend of Rs 2 per share declared for FY26
2 min read

HDB Financial Services Q2 profit slips 1.5 pc to Rs 581 crore

HDB Financial Services reports Q2 profit drop to Rs 581 crore, with 13% revenue increase and higher loan provisions

"The bottom line was impacted by the sharp 74 per cent increase in loan losses and provisions - Financial Report"

Mumbai, Oct 15

HDB Financial Services, a subsidiary of HDFC Bank, reported a 1.5 per cent decline in net profit at Rs 581 crore for the second quarter of the current financial year (Q2 FY26), the non-banking financial company said in an exchange filing on Wednesday.

The NBFC had posted a net profit of Rs 591 crore in the corresponding quarter a year ago (Q2 FY25).

However, the company's overall revenue for the quarter increased 13 per cent to Rs 4,545 crore from Rs 4,007 crore in Q2 FY25, despite the decline in profit, due to consistent growth in loans. Additionally, interest income rose 13 per cent annually to Rs 3,887 crore.

The bottom line was impacted by the sharp 74 per cent increase in loan losses and provisions to Rs 748 crore during the quarter.

The company set October 24 as the record date and declared an interim dividend of Rs 2 per share for FY26.

During the quarter, pre-provisioning operating profit was Rs 1,530 crore compared to Rs 1,230 crore for the quarter ended September 30, 2024, an increase of 24.4 per cent. At the same time, loan losses and provisions were Rs 748 crore for Q2 FY26 compared to Rs 431 crore in the previous quarter last year.

The shares of HDB Financial Services closed 0.3 per cent higher at Rs 742.4 each on the NSE on Wednesday.

HDB Financial Services Limited (HDBFS) is a non-deposit-taking non-banking finance company, offering a wide range of loan products to individuals, emerging businesses and micro enterprises. Established in 2007 as a subsidiary of HDFC Bank Limited, HDBFS is categorised as an upper-layer NBFC by the RBI.

Meanwhile, group company HDFC Life Insurance reported a 3.2 per cent year-on-year rise in profit after tax (PAT) to Rs 449 crore for the same quarter, while its net premium income grew 13 per cent to Rs 18,871 crore. On a half-yearly basis, HDFC Life's PAT rose 9 per cent to Rs 994 crore.

- IANS

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Reader Comments

R
Rohit P
HDFC group companies always maintain good standards. Even with profit decline, they're declaring dividend - that shows confidence in future performance. The share price holding up well too! 👍
S
Sarah B
The 74% increase in loan losses is concerning. Are they taking too much risk with lending? Need to see if this trend continues in next quarter. Otherwise, the operational performance looks solid.
A
Arjun K
Pre-provisioning operating profit up 24.4% is the real story here! The core business is growing well. The profit dip is just because of conservative provisioning - better to be safe than sorry in current economic conditions.
M
Michael C
HDB Financial has been quite aggressive in SME lending recently. The increased provisions might reflect the current stress in that segment. Still, ₹2 dividend per share is a positive for shareholders.
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Nikhil C
Interest income growth of 13% is good, but the massive jump in provisions is eating into profits. Hope management addresses this in their investor call. Overall, HDFC group companies have good track record so not too worried. 🙏

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