HDFC Bank

Stable performance

HDFC Bank has reported 12% growth in net profit at Rs 18155.21 crore for the quarter ended June 2025 (Q1FY2026). The bank has posted healthy 5% growth in net interest income (NII), while the core fee income of the bank improved 8% in Q1FY2026. The Net Interest Margin (NIM) of the bank improved to 3.35% in Q1FY2026 compared to 3.47% in the corresponding quarter of previous year.

HDFC Bank has recorded gains of Rs 9130 crore (Rs 7800 crore post tax) from a partial divestment through an offer for sale in the recent IPO of its subsidiary HDB Financial Services in Q1FY2026 leading to more than two-fold increase in non-interest income in Q1FY2026. Excluding the gains from stake sale, the bank has still posted strong 18% growth in the non interest income.

The operating profit of the bank has jumped 50% including the gains from stake sale, while excluding the gains the operating profit has moved up 11% in Q1FY2026.

The Bank has considered this as an opportune stage to enhance its floating provisions, which are not specific to any portfolio, nor meant for any specific anticipated risks, but act as a countercyclical buffer for making the balance sheet more resilient. Accordingly, HDFC Bank has made floating provisions of Rs 9000 crore (post tax Rs 6800 crore) and additional contingent provisions of Rs 1700 crore (post tax Rs 1300 crore) in Q1FY2026. This led to sharp 455% jump in overall provisions to Rs 14442 crore in Q1FY2026. Excluding these additional provisions, the provisions of the bank has increased 44% to Rs3740 crore in Q1FY2026.

PBT of the bank was flat yoy for Q1FY2026. However, PBT has increased 7% for Q1FY2026, excluding gains from stake sale as well as additional provisions.

The bank has also reversed Rs 1144.46 crore of tax provisions in Q1FY2026 on account of favourable orders.

On net basis, there was positive impact of approximately Rs 800 crore on net profit (which includes post tax gains of Rs 7800 crore from stake sales, post-tax charge of Rs 6800 crore for floating provisions, post-tax charge of Rs 1300 crore for contingency provisions and tax provisions reversals of Rs 1145 crore). The net profit excluding this positive impact has increased 7% for Q1FY2026 as against reported 12% growth in the net profit.

On business front, the bank as has posted 11% growth in business with 7% rise in loan book. The asset quality of the bank was stable in Q1FY2026. Bank has reduced the credit to deposit ratio to 96.0% at end June 2025 from 104.5% at end June 2024. However, the CASA ratio of the bank has declined to 33.9% at end June 2025 from 36.3% at end June 2024.

Asset quality stable: The bank has maintained stable asset quality in Q1FY2026.

The fresh slippages of loans stood at Rs 9000 crore in Q1FY2026 compared with 7500 crore in previous quarter and Rs 7900 crore in the corresponding quarter last year.

The recoveries and upgradations of NPAs stood at Rs 4200 crore, while the write-off of loans was at Rs 3000 crore in Q1FY2026.

GNPA ratio was at 1.40% at end June 2025 (1.14% excluding NPAs in the agricultural segment), as against 1.33% at end March 2025 (1.13% excluding NPAs in the agricultural segment), and 1.33% at end June 2024 (1.16% excluding NPAs in the agricultural segment).

Provision coverage ratio stood at 67.00% at end June 2025 compared to 68.00% a quarter ago and 71.00% a year ago.

The capital adequacy ratio of the bank stood at 19.9% with Tier I ratio at 17.8% at end June 2025.

The risk weighted assets of the bank has increased 11% YoY to Rs 2715800 crore end June 2025,

Asset Quality Indicators: HDFC Bank
?	Jun-25	Mar-25	Dec-24	Sep-24	Jun-24	Variation
						QoQ	YoY
Gross NPA (Rs Crore)	37040.80	35222.64	36018.58	34250.62	33025.69	5	12
Net NPA (Rs Crore)	12275.99	11320.43	11587.54	10308.54	9508.44	8	29
% Gross NPA	1.40	1.33	1.42	1.36	1.33	7	7
% Net NPA	0.47	0.43	0.46	0.41	0.39	4	8
% PCR	67.00	68.00	68.00	70.00	71.00	-100	-400
% CRAR - Basel III	19.88	19.55	19.97	19.77	19.33	33	55
% CRAR - Tier I - Basel III	17.80	17.70	18.03	17.79	17.33	10	47
Variation in basis points for figures given in percentages and in % for figures in Rs crore

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Business Highlights:

Business growth improving: The business of the bank has increased 11% YoY to Rs 5417289 crore end June 2025, driven by 7% in advances to Rs 2653200 crore. Deposits jumped 16% to Rs 2764089 crore at end June 2025.

CASA deposits ratio declines: The CASA deposits of the bank increased 8% YoY to Rs 937000 crore at end June 2025. The current account deposits increased 11% to Rs 298000 crore, while saving account deposits moved up 7% to Rs 639000 crore end June 2025. The CASA ratio declined to 33.9% at end June 2025 compared to 36.3% at end June 2024, while eased from 34.8% a quarter ago. The term deposits have increased 21% to Rs 1827089 crore end June 2025.

Strong loan growth: Advances growth was driven by retail loans rising 8% YoY to Rs 1406200 crore at end June 2025, while credit to agriculture increased 15% to Rs 115300 crore and MSME 17% to Rs 552300 crore at end June 2025. The corporate credit rose 2% to Rs 708200 crore end June 2025. The overseas credit has jumped 21% to Rs 45100 crore end June 2025.

Investment book of the bank increased 27% YoY to Rs 896664 crore at end June 2025.

Margins ease: The bank has shown 10 bps YoY decline in cost of funds to 4.80%, while yield on funds declined 30 bps YoY to 8.1% in Q1FY2026. Thus, the NIM has declined 12 bps YoY to 3.35%, while dipped 19 bps qoq to 3.35% in Q1FY2026.

Branch expansion: The bank has added 44 branches and 112 ATMs in Q1FY2026, taking overall tally to 9499 branches and 21251 ATM`s end June 2025. Bank?s distribution network was at 9,499 branches and 21,251 ATMs across 4,153 cities / towns at end June 2025, as against 8,851 branches and 21,163 ATMs across 4,081 cities / towns at end June 2024. In addition, the bank has 15,322 business correspondents, which are primarily manned by Common Service Centres (CSC). The number of employees were at 2,18,822 at end June 2025 (as against 2,13,069 at end June 2024).

Book value of the bank stood at Rs 676.3 per share at end June 2025, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 660.0 per share at end June 2025.

Quarterly Performance

NII growth ease as NIM moderates: Bank has recorded 6% increase in the interest earned at Rs 77470.20 crore, while interest expenses increased 7% to Rs 46032.23 crore in Q1FY2026. NII rose at slower pace 5% to Rs 31437.97 crore in the quarter ended June 2025.

Healthy growth in non-interest income: Bank has posted strong 8% growth in core fee income to Rs 7590 crore, while the recoveries and other income jumped 19% to Rs 2400 crore and forex income 16% to Rs 1630 crore. The treasury income declined 345% to Rs 980 crore, while transaction of Rs 9130 crore led to 104% surge in the overall non-interest income to Rs 21729.83 crore in the quarter ended June 2025.

Expenses ratio improves: The operating expenses of the bank increased 5% to Rs 17433.84 crore, as other expenses moved up 5% to Rs 11275.87 crore, while employee expenses increased 5% to Rs 6157.97 crore in Q1FY2026. Cost to income ratio improved to 39.6% in Q1FY2026 compared with 41.0% in Q1FY2025. Operating Profit to increased 50% to Rs 35733.96 crore.

Provisions and contingencies jump: The bank has shown 455% surge in provisions to Rs 14441.63 crore.

Effective tax rate declined to 14.7% in Q1FY2026 from 24.0% in Q1FY2025. Net Profit rose by 12% YoY to Rs 18155.21 crore during quarter ended June 2025.

Consolidated financial results:

The Bank?s consolidated net revenue was Rs 85350 crore for Q1FY2026. The consolidated profit after tax for Q1FY2026 was Rs 16260 crore

Subsidiaries

HDB Financial Services (HDBFSL), is a non-deposit taking NBFC in which the Bank holds a 74.2% stake. For Q1FY2026, HDBFSL?s net revenue was at Rs 2730 crore. Profit after tax for Q1FY2026 was Rs 570 crore compared to Rs 580 crore for Q1FY2025. The total loan book was Rs 109300 crore at end June 2025. Stage 3 loans were at 2.56% of gross loans. Total CAR was at 20.2% with Tier-I CAR at 15.7%.

HDFC Life Insurance Company (HDFC Life), in which the Bank holds a 50.3% stake, is a leading life insurance solutions provider. Profit after tax for Q1FY2026 was Rs 550 crore compared to Rs 480 crore for Q1FY2025, a growth of 14.4%.

HDFC ERGO General Insurance Company Ltd (HDFC ERGO), in which the Bank holds a 50.3% stake, offers a range of general insurance products. Profit after tax for Q1FY2026 was Rs 210 crore compared to Rs 130 crore for Q1FY2025, a growth of 56.4%.

HDFC Asset Management Company Ltd (HDFC AMC), in which the Bank holds a 52.4% stake, is the Investment Manager to HDFC Mutual Fund, and offers a comprehensive suite of savings and investment products. For Q1FY2026, HDFC AMC?s Quarterly Average Assets Under Management were approximately Rs 828600 crore. Profit after tax for Q1FY2026 was Rs 750 crore compared to Rs 600 crore for Q1FY2025, a growth of 23.8%.

HDFC Securities (HSL), in which the Bank holds a 94.4% stake, is amongst the leading broking firms. For Q1FY2026, HSL?s total revenue was Rs 730 crore. Profit after tax for Q1FY2026 was Rs 230 crore, as against Rs 290 crore for Q1FY2025.

Financial Performance FY2025:

Bank has posted 11% increase in net profit to Rs 67347.35 crore in the year ended March 2025 (FY2025). The net interest income increased 13% to Rs 122670.08 crore, while non-interest income fell 7% to Rs 45632.28 crore, pushing up net total income by 7% to Rs 168302.36 crore in FY2025. The operating expenses increased 8% to Rs 68174.89 crore, while provision and contingencies dipped 50% to Rs 11649.42 crore, allowing profit before tax to increase 25% to Rs 88478.05 crore in FY2025. The cost-to-income ratio was steady at 40.5% in FY2025 compared to 40.2% in FY2024. An effective tax rate rose to 23.9% in FY2025 compared to 14.2% in FY2024. The net profit has increased 11% to Rs 67347.35 crore in FY2025.

Dividend and bonus

Bank has has declared a special interim dividend of Rs 5 per equity share of Rs 1, pre-bonus issuance.

Bank has approved issuance of bonus shares in the proportion of 1:1, i.e. 1 bonus equity share of Rs 1 each for every 1 fully paid-up equity share held as on the record date, subject to statutory and regulatory approvals as applicable, and approval of shareholders of the Bank to be obtained by way of postal ballot.

HDFC Bank: Results
Particulars	2506 (3)	2406 (3)	Var %	2503 (12)	2403 (12)	Var %
Interest Earned	77470.20	73033.14	6	300517.03	258340.56	16
Interest Expended	46032.23	43196.00	7	177846.95	149808.09	19
Net Interest Income	31437.97	29837.14	5	122670.08	108532.47	13
Other Income	21729.83	10668.11	104	45632.28	49240.99	-7
Net Total Income	53167.80	40505.25	31	168302.36	157773.46	7
Operating Expenses	17433.84	16620.61	5	68174.89	63386.01	8
Operating Profits	35733.96	23884.64	50	100127.47	94387.45	6
Provisions & Contingencies	14441.63	2602.06	455	11649.42	23492.14	-50
Profit Before Tax	21292.33	21282.58	0	88478.05	70895.31	25
EO	0.00	0.00	-	0.00	0.00	-
PBT after EO	21292.33	21282.58	0	88478.05	70895.31	25
Provision for tax	3137.12	5107.83	-39	21130.70	10083.03	110
PAT	18155.21	16174.75	12	67347.35	60812.28	11
EPS*(Rs)	94.7	85.0	?	88.0	80.0	?
Equity	766.8	760.8	?	765.2	759.7	?
Adj BV (Rs)	660.0	585.9	?	640.1	568.3	?
* EPS and Adj BV are calculated on diluted equity as given for each year. Face Value: Rs 1, Figures in Rs crore
Source: Capitaline Corporate Database

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