HDB Financial Services Limited announced its unaudited financial results for the quarter and half year ended September 30, 2025, following a Board meeting held in Mumbai on Wednesday. The non-banking financial company (NBFC) reported healthy growth in its loan book and income, though higher provisions weighed on profitability for the quarter.
Strong Growth in AUM and Loan Book
The company’s Assets Under Management (AUM) rose to ₹1,11,721 crore as of September 30, 2025, registering a 12.8% growth over ₹99,076 crore a year earlier. Total Gross Loans stood at ₹1,11,409 crore, up 13.0% from ₹98,624 crore in the same period last year, reflecting robust credit demand across segments.
Income Growth Remains Healthy
HDB Financial Services reported a strong uptick in income metrics during the quarter.
- Net Interest Income (NII) grew 19.6% year-on-year, reaching ₹2,192 crore compared to ₹1,833 crore in Q2FY25.
- Net Total Income increased 18.4% to ₹2,851 crore, up from ₹2,408 crore a year ago.
- Pre-Provision Operating Profit (PPOP) rose 24.4% to ₹1,530 crore, indicating efficient cost management and continued income momentum.
Provisions Impact Profitability
Loan losses and provisions surged to ₹748 crore in Q2FY26, significantly higher than ₹431 crore in the same quarter last year. The sharp rise in provisions impacted profitability, with Profit Before Tax (PBT) declining slightly to ₹782 crore, compared to ₹799 crore in Q2FY25.
Consequently, Profit After Tax (PAT) for the quarter stood at ₹581 crore, marginally lower than ₹591 crore recorded a year earlier.
For the half year ended September 30, 2025, the company reported a PAT of ₹1,149 crore, compared to ₹1,173 crore in the first half of the previous fiscal, reflecting resilience amid a challenging credit environment.
Asset Quality Deterioration
Asset quality weakened during the quarter.
- Gross Stage 3 loans rose to 2.81% from 2.10% in September 2024.
- Net Stage 3 loans increased to 1.27%, compared to 0.83% a year ago.
- Provision Coverage Ratio (PCR) on stage 3 assets stood at 54.73%, lower than 60.69% in the prior year period.
Outlook
While profitability was moderated by higher credit costs, HDB Financial Services continues to post consistent growth in its loan book and operating income. The company’s focus remains on prudent risk management and maintaining healthy capital adequacy amid evolving macroeconomic conditions.
The steady rise in AUM and net income indicates strong operational performance, though asset quality pressures suggest cautious optimism for the coming quarters.
