HDB Financial’s First Post-Listing Results Underwhelm; SEBI Analyst Backs Long-Term Story

Shares of HDB Financial Services fell on Thursday after the HDFC Bank subsidiary reported a 1.6% year-on-year decline in net profit to ₹581 crore for the September quarter, as provisions for stressed loans increased sharply. Sequentially, profit was up 2.4% from ₹568 crore in the previous quarter.

Net Interest Income rose 19.6% year-on-year to ₹2,192 crore, while Net Interest Margins improved to 7.9% from 7.5% a year ago. Gross stage-three assets increased to 2.81% from 2.1% a year earlier. 

Gross loans stood at ₹1.11 trillion as of September 30, 2025, up 13% year-on-year.

Management said growth was led by the auto, two-wheeler, and consumer durables segments, supported by government measures to boost consumption and improving rural incomes.

Analyst view

SEBI-registered analyst Pradeep Carpenter said HDB Financial’s first quarterly results post-listing showed steady performance, with business growth driven by lending income and a rising customer base. 

He said the company’s overall business expanded, but provisions for potential loan losses also increased.

Carpenter noted that HDB now serves more than 19 million customers through over 1,680 branches across India and is investing in digital lending platforms to improve access and speed. The company maintains a strong capital position with a Capital to Risk (Weighted) Assets Ratio (CRAR) of 20.18%.

He added that earnings could grow around 23% annually over the next few years, while revenue may expand 22% per year as operations become more efficient.

Brokerage view

Motilal Oswal said HDB Financial reported a muted quarter, with modest loan growth and disbursements affected by heavy rainfall and demand deferment ahead of expected GST rate cuts. 

Asset quality weakened, leading to higher credit costs, though margins improved by 20 basis points due to lower borrowing costs.

The brokerage said the lender offers exposure to India’s growing retail finance market, supported by a granular, largely secured loan portfolio and sound credit discipline. It added that the company’s governance and in-house collection systems position it well for sustainable long-term value creation.

Motilal Oswal maintained a ‘Neutral’ rating on the stock with a target price of ₹820 per share.

What is the retail mood on Stocktwits?

On Stocktwits, retail sentiment was ‘extremely bullish’ amid ‘extremely high’ message volume.

HDB Financial Services’ stock has declined 12% so far in 2025.

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