HDB Financial's profit rises 38.29% YoY as margin widens
Revenue growth outpaced expenses, but the tax rate rose 3.09 percentage points; the stock's five-session fall was unusually large against its results history.
Filed 15 Jul 2026, 16:18 IST · after market close · HDB Financial Services Ltd (HDBFS)
Key takeaways
- Standalone net profit rose 38.29% year on year to Rs 785.19 cr in Q1FY27.
- Operating margin widened 1.47 percentage points year on year as revenue grew 10.58%, faster than expenses at 6.84%.
- The stock was down 7.92% five sessions after the results, versus a 3.14% median absolute move after its past four results.
Price around the results
Standalone profit growth outpaced revenue in Q1FY27
HDB Financial Services reported standalone net profit growth of 38.29% year on year, ahead of its 10.58% revenue growth. Profit before tax rose 44.02%, while interest expense increased only 0.78%, supporting the sharper pre-tax improvement. Other income was zero, so earnings did not rely on non-operating income.
Lower cost growth lifted operating margin, while tax rose
Expenses grew 6.84% year on year, slower than revenue, lifting operating margin by 1.47 percentage points. The margin also edged up 0.07 percentage points sequentially as revenue growth of 4.06% exceeded expense growth of 3.87%. The tax rate rose 3.09 percentage points year on year to 25.58%, which limited the conversion of pre-tax profit growth into net profit growth.
Margin recovered from Q2FY26 and remains below the peer median
Operating margin moved from 56.51% in Q1FY26 to 55.63% in Q2FY26 and 55.96% in Q3FY26 before recovering to 57.91% in Q4FY26 and 57.98% in Q1FY27. Among 24 Financial Services companies that had reported the same quarter, HDB Financial's margin was 4.70 percentage points below the 62.68% sector median. Its margin ranked 10th from the bottom in that peer set.
Management highlights a 1,710-branch Tier-2-plus expansion strategy
Management said the company is expanding its pan-India presence with a focus on Tier-2-plus markets. The company told investors it had 1,710 branches across 31 states and union territories as of June 30, 2026.
The post-results fall was larger than the stock's usual reaction
The results were filed after market close on July 15, and the stock initially gained 0.07% on the next session despite a 2.88% opening gap. It was down 2.55% after one session and 7.92% after five sessions, while its relative five-session performance was -7.05%. Its previous four results produced two rises and two falls, with a median absolute move of 3.14%, making this decline unusually large by that history.
Q1FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,938 cr | ₹4,745 cr | +4.06% | +10.58% |
| Other income | ₹0 cr | ₹0 cr | — | — |
| Expenses | ₹2,075 cr | ₹1,997 cr | +3.87% | +6.84% |
| Operating profit | ₹2,863 cr | ₹2,748 cr | +4.19% | +13.45% |
| Operating margin (%) | 57.98% | 57.91% | — | — |
| Interest | ₹1,753 cr | ₹1,682 cr | +4.21% | +0.78% |
| Depreciation | ₹55 cr | ₹54 cr | +0.98% | +6.72% |
| Profit before tax | ₹1,055 cr | ₹1,011 cr | +4.33% | +44.02% |
| Tax | ₹270 cr | ₹261 cr | +3.58% | +63.78% |
| Net profit | ₹785 cr | ₹751 cr | +4.60% | +38.29% |
| EPS (₹) | ₹9.46 | ₹9.04 | +4.65% | +32.68% |
Operating margin of 57.98% compares with a Financial Services sector median of 62.68% across 24 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.07% | +0.10% |
| Next session | -2.55% | — |
| 5 sessions | -7.92% | -7.05% |
Volume on the results session was 4.42× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- As of June 30, 2026, the company had 1,710 branches across 31 states and union territories.
Expansion
- The company is focusing on expanding its pan-India presence in Tier-2-plus markets.
- The company reports 1,710 branches across 31 states and union territories.
What to watch
- Whether standalone operating margin holds above 57.98% next quarter.
- Whether the tax rate moves back from 25.58% after rising 3.09 percentage points year on year.
- Whether the branch network expands beyond 1,710 across 31 states and union territories.