HDB Financial Services Shares Surge 10% on Q4 Profit Surpassing Expectations

HDB Financial Services Sees Strong Q4 Results, Stock Rises 9.55%

HDB Financial Services, a non-bank lender, reported a strong set of Q4 results on Thursday, leading to a nearly 10 percent surge in its stock price in early trade. The company's improving asset quality and lower credit costs were highlighted as key positives by brokerages. As of the early morning trade, the stock was trading at Rs 705.85, up 9.55 percent from the previous day.

Key Highlights from Q4 Results

| Metric | Q4 FY26 | Q4 FY25 | % Change | | --- | --- | --- | --- | | Net Profit | Rs 751 crore | Rs 531 crore | 41.4% | | Interest Income | Rs 4,081 crore | Rs 3,620 crore | 13% | | AUM Growth | 11% YoY | - | - | | Net Interest Margins | 14 basis points sequential expansion | - | - |

The company's net profit saw a 41.4 percent year-on-year rise to Rs 751 crore in the March quarter, driven by lower provisions, improving asset quality, and steady loan demand. Brokerages were broadly constructive on the earnings performance, with views differing on the pace of growth ahead.

Nomura maintained a 'Neutral' rating on HDB Financial Services shares, with a target price of Rs 740 per share. The brokerage noted that asset quality concerns are largely behind the company and the focus is now shifting towards growth. However, it flagged the West Asia conflict as a key risk factor.

Jefferies took a more positive stance, reiterating a 'Buy' rating with a target price of Rs 845 per share. The brokerage highlighted a 42 percent year-on-year jump in profit, aided by lower provisions, along with a 14 basis points sequential expansion in net interest margins due to reduced funding costs. It noted that asset quality improved across segments and sees no major impact from the West Asia conflict so far.

On growth, both brokerages pointed to a relatively modest expansion in the loan book, with AUM growth at around 11 percent year-on-year. While Nomura expects momentum to improve, Jefferies noted that disbursements have picked up and expects stronger AUM growth ahead, along with lower costs and a 22 percent earnings CAGR through FY28.

Operationally, HDB Financial reported interest income growth of 13 percent year-on-year to Rs 4,081 crore in Q4, while asset quality metrics showed sequential improvement. The company's AUM stood at Rs 1,18,733 crore as of March-end, up 10.7 percent from a year ago.

Despite the recent bounce, the stock remains down over 23 percent since its listing in July 2025.