HDFC Bank, India’s largest private-sector lender, released its Q2 FY2026 (July–September 2025) financial results on October 18, 2025, reporting steady growth in core operations despite experiencing slight margin pressure. The quarter reflected a balanced performance across retail and corporate segments, driven by strong non-interest income growth, healthy loan demand, and stable asset quality.
As one of the most closely watched stocks in the Indian banking sector, HDFC Bank’s results offer key insights into the broader trends shaping the industry.
In this article, we’ll break down HDFC Bank’s Q2 FY2026 results, including its financial highlights, profitability trends, and management outlook for the coming quarters.
Key Highlights
| Metric | Q2 FY26 | Q2 FY25 | YoY Growth |
|---|---|---|---|
| Revenue (Total Income) | ₹45,900 crore | ₹41,600 crore | +10.3% |
| Net Profit (PAT) | ₹18,641 crore | ₹16,820 crore | +10.8% |
| EBITDA (Operating Profit) | ₹26,890 crore | ₹24,450 crore | +10% |
| Earnings Per Share (EPS) | ₹23.20 | ₹21.00 | +10.5% |
Management Commentary
HDFC Bank’s MD & CEO Sashidhar Jagdishan stated that the bank continues to invest in digital capabilities, analytics, and new-age lending platforms to drive growth. He added that the bank’s focus on expanding its retail and SME portfolios, along with prudent risk management, remains key to sustaining profitability.
Management emphasized that while net interest margins (NIM) saw slight compression to 3.27% (from 3.35% in Q1 FY26), this was a result of deposit repricing and liquidity management efforts. The leadership expects margins to stabilize in the coming quarters as credit demand picks up.
Segment Performance
- Retail Banking: Continued to be the core growth driver, led by higher disbursements in personal, auto, and credit card loans.
- Corporate & Wholesale Banking: Saw stable traction, with moderate growth of 6.4% YoY, aided by working capital demand and project financing.
- SME Lending: Expanded by 17% YoY, highlighting strong credit demand from small businesses.
- Other Income: Rose sharply by 25% YoY, supported by treasury income, fee-based services, and contributions from subsidiaries like HDB Financial Services.
Market Reaction
Following the Q2 FY26 results announcement, HDFC Bank’s stock traded mildly lower by around 1.5% in early trading due to the slight margin compression. However, most analysts maintained a positive outlook, citing the bank’s strong fundamentals, steady earnings growth, and healthy asset quality.
Brokerages such as Motilal Oswal and ICICI Securities continue to hold a “Buy” rating, with target prices between ₹1,800–₹1,950 per share for FY2026.
Peer Comparison
Compared with peers like ICICI Bank and Axis Bank, HDFC Bank maintained its leadership in profitability and balance sheet size. However, its NIMs (3.27%) remain slightly below ICICI Bank’s 4.30%, reflecting higher funding costs post the HDFC merger. Despite that, HDFC Bank’s asset quality (Gross NPA: 1.24%) remains among the best in the sector.
Future Outlook
Analysts expect loan growth to pick up in the second half of FY26 as interest rate pressures ease. HDFC Bank is focusing on expanding its rural footprint, enhancing digital channels, and leveraging data analytics to improve cross-selling efficiency.
The management also guided for double-digit growth in advances and stable RoA (~2%) for the full year FY26, supported by strong deposit inflows and resilient fee income.
FAQs
1. What was HDFC Bank’s net profit in Q2 FY26?
HDFC Bank reported a net profit of ₹18,641 crore, up 10.8% year-on-year.
2. Did HDFC Bank beat market expectations?
Yes, the bank’s profit slightly exceeded analyst estimates, driven by higher non-interest income and lower provisions.
3. How did HDFC Bank’s margins perform this quarter?
Net interest margin (NIM) declined modestly to 3.27% from 3.35% in the previous quarter due to deposit cost repricing.
Conclusion
HDFC Bank’s Q2 FY26 results reflect steady financial performance, strong profit growth, and resilient asset quality, despite near-term NIM pressure. With a diversified loan book, expanding digital initiatives, and robust balance sheet strength, the bank remains well-positioned for sustained growth in FY26 and beyond.
Sources: HDFC Bank Investor Presentation
