HDB Financial profit soars 34% to Rs 780 crore in Q2 FY27

HDB Financial Services, the non-banking financial company and HDFC Bank subsidiary, on Wednesday reported a 34.2 per cent surge in profit after tax to Rs 780 crore for the September quarter of FY27, driven by higher loan demand and lower provisions. The NBFC had earned Rs 581 crore in the year-ago period, it said in a stock exchange filing. The HDB Q2 results mark a continued recovery for the lender.

Net interest income rose 15.6 per cent to Rs 2,534 crore in the July-September quarter from Rs 2,192 crore in the corresponding quarter of the previous fiscal. Total income rose 12 per cent to Rs 3,188 crore from Rs 2,851 crore a year ago. The HDB Q2 results were reported after market hours on Wednesday.

HDB Financial listed on the stock exchanges earlier this year, and the Q2 performance is being watched closely as a gauge of the NBFC's post-listing trajectory. The lender, one of India's largest non-banking financial companies, has focused on secured lending and granular retail loans to steady its book.

HDB Financial Q2: loan book and asset quality

Loan losses and provisions declined 2.5 per cent to Rs 730 crore for the quarter ended September 30, 2026, compared with Rs 748 crore in the same quarter last year. The company registered 12 per cent growth in its gross loan book to Rs 1.24 lakh crore from Rs 1.12 lakh crore a year ago.

Asset quality improved, with gross stage 3 loans declining to 2.43 per cent of total loans from 2.81 per cent in the year-ago quarter, and net stage 3 loans falling to 1.09 per cent from 1.27 per cent. Gross stage 3 loans — those overdue by more than 90 days — stood at 2.43 per cent at the end of September, down from 2.81 per cent a year earlier, though marginally up from 2.34 per cent at the end of June. The improvement in asset quality comes after a deliberate pullback from riskier unsecured segments, a strategy the company says is now bearing fruit. Assets under management stood at Rs 1,24,638 crore as on September 30, 2026, up 11.6 per cent from Rs 1,11,721 crore a year earlier.

HDB Financial's cautious lending strategy

HDB Financial has spent the past year tightening underwriting in stressed segments such as unsecured business loans, commercial vehicles and construction equipment. That caution has cost some growth but bought asset-quality gains — and with provisions now falling, the NBFC appears to be entering a cleaner phase of its credit cycle.

HDB Financial declares interim dividend

The company's board approved an interim dividend of Rs 2 per equity share, with October 23 fixed as the record date to determine eligible shareholders. HDB Financial has been working to improve asset quality through a more cautious approach to lending in stressed segments including unsecured business loans, commercial vehicles and construction equipment, after grappling with elevated bad loans in the first half of the previous fiscal. The interim dividend underscores the board's confidence in the lender's capital position, with the balance sheet now carrying lower stressed assets than a year ago. Shareholders of record on October 23 will be eligible for the payout, with the dividend reflecting the lender's improved earnings trajectory. The HDFC Bank subsidiary's steady AUM growth and falling provisions suggest that discipline is now showing up in the numbers.