HDFC Bank Results Q1FY26: Profit Jumps to ₹18,155 Crore, Revenue Up by 18.5%

HDFC Bank has announced its financial results for the quarter ending June 30, 2025. India's largest private sector lender reported strong performance with notable growth in both revenue and profitability, alongside strategic corporate actions.

Net Profit: Stood at ₹18,155 crore on a standalone basis, a rise of 12.2% from the same quarter last year.

Total Income: Grew by 18.5% year-on-year to ₹99,200 crore, supported by both interest and non-interest income.

Net Interest Income: Reached ₹31,440 crore, representing a 5.4% increase from Q1 FY25.

Special Announcements: The board approved a first-ever 1:1 bonus share issue and declared an interim dividend of ₹5 per share.

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Table of Contents:

1. Performance Analysis: A Closer Look
2. Financial Metrics at a Glance
3. Business Segment Performance
4. Management Commentary & Future Outlook
5. Frequently Asked Questions (FAQs)

Performance Analysis: A Closer Look

Revenue Growth

HDFC Bank's total income for Q1 FY26 was ₹99,200 crore. This represents a healthy increase compared to ₹83,701 crore in the same quarter of the previous fiscal year. The growth was significantly bolstered by transaction gains of ₹9,128 crore from the partial divestment of HDB Financial Services through its recent IPO.

On a sequential basis, total income saw substantial growth from the previous quarter, driven by the one-time gains and improved fee income.

Profitability & Net Interest Margins

The bank's standalone net profit jumped to ₹18,155 crore. This year-on-year growth of 12.2% signals resilient operational performance despite margin pressures. However, the consolidated net profit declined marginally by 1.3% to ₹16,258 crore due to higher provisions.

The core net interest margin compressed to 3.35% from 3.46% in the previous quarter, reflecting faster repricing of assets compared to deposits in the current interest rate environment.

(HDFC Bank Q1 FY26 Financial Performance - Key metrics showing strong growth in deposits and profitability)

Financial Metrics at a Glance

Here is a comprehensive comparison of HDFC Bank's performance versus the same quarter last year:

Asset Quality & Provisions

Asset quality remained largely stable with gross NPA ratio at 1.40%, a marginal increase from 1.33% in the previous quarter. The bank strengthened its provision coverage by creating ₹9,000 crore in floating provisions and ₹1,700 crore in contingent provisions, utilising the gains from the HDB Financial IPO.

Business Segment Performance

Deposit Mobilisation Excellence

HDFC Bank demonstrated exceptional deposit growth of 16.2% year-on-year, with total deposits reaching ₹27.64 lakh crore. Average deposits grew by 16.4% to ₹26,576 billion, significantly outpacing loan growth. This strategic focus helped improve the credit-deposit ratio to healthier levels.

Advances Growth Strategy

Gross advances grew at a measured 6.7% year-on-year to ₹26.53 lakh crore. The bank continued its calibrated approach to loan growth as part of its post-merger balance sheet optimisation strategy. Advances under management showed improvement with 8.3% year-on-year growth.

Fee Income Performance

Non-interest income surged to ₹21,730 crore, primarily driven by the HDB Financial transaction gains. Excluding one-time items, fee income from retail banking, payments, and wholesale banking segments showed steady growth.

Management Commentary & Future Outlook

The management expressed confidence in the bank's strategic direction post-merger integration. Sashidhar Jagdishan, Managing Director and CEO, stated: "I believe we have successfully navigated the merger and the bank is now positioned for faster growth. The reset in loan growth and the consolidation of the merger have resulted in a much stronger bank, that is now poised to capitalise further on growth opportunities. 

The bank's outlook remains optimistic, with management guidance indicating expectations to match industry-level advances growth in FY26 and exceed industry growth from FY27. Key strategic focuses include:

• Restoration of credit-deposit ratio to optimal levels (currently at 96%)

• Enhancement of deposit franchise and CASA ratio improvement

• Technology-driven customer engagement initiatives

• Capitalising on improving economic sentiment and rural consumption recovery

Frequently Asked Questions (FAQs)

1. What was HDFC Bank's net profit in Q1 FY26?
HDFC Bank's standalone net profit for Q1 FY26 was ₹18,155 crore, marking a year-on-year increase of 12.2%.

2. How did HDFC Bank's revenue change in this quarter?
The bank's total income grew by 18.5% year-on-year to ₹99,200 crore in Q1 FY26, supported by both operational income and transaction gains.

3. What are the key takeaways from HDFC Bank's latest results?
Key takeaways include strong deposit growth of 16.2%, healthy profit growth of 12.2%, successful HDB Financial IPO execution, announcement of first-ever bonus shares, and management's confident outlook for accelerated growth ahead.

4. Did HDFC Bank declare any dividend?
Yes, the board of HDFC Bank has approved a special interim dividend of ₹5 per equity share for FY 2025-26, along with announcing a 1:1 bonus share issue.

5. How is HDFC Bank's asset quality?
Asset quality remains stable with gross NPA ratio at 1.40% and net NPA ratio at 0.47%. The bank has strengthened its provision coverage with additional floating and contingent provisions.

6. What is HDFC Bank's guidance for future growth?
Management has indicated confidence in matching industry-level loan growth in FY26 and exceeding industry growth from FY27, supported by improved balance sheet metrics and economic recovery.