HDFC Bank Q1 profit drops to ₹16,258 Cr despite ₹9,128 Cr HDB IPO gain

HDFC Bank reported a consolidated net profit of ₹16,258 crore for Q1 FY26, down from ₹16,475 crore in the same quarter last year, despite a one-time pre-tax gain of ₹9,128 crore from the IPO of its subsidiary, HDB Financial Services.

The decline in profit was mainly due to a sharp rise in provisions, which jumped to ₹14,442 crore. This includes ₹9,000 crore in floating provisions and ₹1,700 crore in contingent buffers, reflecting caution amid potential asset quality stress.

Key Highlights:

NII Growth: Standalone Net Interest Income (NII) rose 5.4% YoY to ₹31,438 crore.

CASA Ratio: Fell to 33.9% from 38.2% YoY. Savings deposits stood at ₹6.39 lakh crore and current account deposits at ₹2.98 lakh crore.

Capital Adequacy: Improved to 19.88% from 19.33%.

Other Income: Soared to ₹21,730 crore, aided by HDB IPO and strong trading gains.

NPA Ratios: Gross NPA at 1.40% and Net NPA at 0.47%, both slightly higher YoY.

Return on Assets (RoA): Held steady at 0.48%.

Operating Profit: Stood at ₹35,734 crore.

Bonus and Dividend Announcements:

The board approved:

A special interim dividend of ₹5 per share, payable on August 11 to shareholders as of July 25.

A 1:1 bonus issue, subject to approvals, with a record date of August 27.

Market Expectations vs Reality:

Analysts had estimated a 7% YoY rise in NII to ₹31,885 crore and a 7.4% profit growth to ₹17,385 crore. The actual numbers came in lower than expected, contributing to a 1.56% decline in HDFC Bank’s share price on Friday, closing at ₹1,959 on the NSE.

HDFC’s stake in HDB dropped to 74.19% post-IPO from 94.32% last quarter. Despite strong income growth, rising provisions and declining CASA weighed on overall performance.