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Informist, Tuesday, Jul. 14, 2026

 

By Nandini Sinha

 

MUMBAI – HDB Financial Services Ltd. is expected to post a healthy on-year growth in its net profit for the June quarter due to strong growth in its assets under management, according to brokerages tracking the non-banking financier.

 

The company is expected to report a net profit of INR 7.76 billion, up nearly 37% on year and over 3% on quarter, according to an average of estimates from five brokerages. The non-banking finance company had reported a net profit of INR 7.51 billion for the March quarter. The highest estimate for the company's June quarter net profit is INR 8.21 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest is INR 7.44 billion from ICICI Securities Ltd.

 

The diversified non-bank lender's Juen quarter net interest income is expected to rise over 17% on year to INR 24.56 billion. Sequentially, it is expected to rise over 2%. The highest estimate for the net interest income is INR 24.62 billion from Motilal Oswal Financial Services Ltd. while the lowest is INR 24.49 billion from Nirmal Bang.

 

A strong growth in assets under management is likely to translate into a strong net interest income for non-banking financial companies, ICICI Securities said. HDB Financial's assets under management are expected to rise to INR 1.21 trillion, up 11% on year and 3% on quarter, according to the brokerage.

 

The company's credit cost is expected to decline 8-9 basis points on year to 2.4% and support its bottom line, according to two brokerages.

 

The two estimates for HDB Financial's disbursement growth vary widely. While Nomura Financial Advisory and Securities (India) Pvt. Ltd. sees a disbursement growth of 16%, Motilal Oswal expects a disbursement growth of 23%. "Overall, we believe management's confidence that the company can disburse rapidly is in all likelihood supported by healthy asset quality trends," Nomura said.

 

Brokerages are divided over the company's net interest margin. While Motilal Oswal, Nomura, and JM Financial Institutional Securities Pvt. Ltd. expect it to be stable on quarter, Nirmal Bang expects a decline of 8 bps on a sequential basis. HDB Financial had reported a net interest margin of 8.23% for the March quarter.

 

"Diversified NBFCs (non-banking financial companies) continue to see strong AUM (assets under management) growth led by consumer durable and PV (passenger vehicle) financing, though rising funding costs are compressing their margins," Nirmal Bang said. "The only drag (for diversified lenders) in the quarter, in our view, should be margin pressure on a q-q (quarter-on-quarter) basis as the cost of funds from bank lines remained elevated," the brokerage said.

 

The outlook on disbursements and loan growth as well as the credit costs are the key factors to monitor for the company, according to Motilal Oswal.

 

HDB Financial will announce its earnings for the June quarter Wednesday. The company's shares have risen nearly 9% since its March quarter earnings were announced. Tuesday, shares of the company ended at INR 743.90 apiece on the National Stock Exchange, down 1.7% from Monday. 

 

Of the seven brokerage reports on the company available with Informist, four have a "buy" recommendation on the stock with an average target price of INR 809 per share. This is nearly 7% higher than the current market price. Two brokerages have a "hold" recommendation, while the remaining one brokerage has a "sell" recommendation at a target price of INR 625 per share.

 

Following are the June quarter earnings estimates of HDB Financial from five brokerages in descending order of the estimate for net profit in INR billion:

 

BROKERAGE NAME	NET INTEREST INCOME	NET PROFIT
Nirmal Bang Equities Pvt. Ltd.	24.49	8.21
Nomura Financial Advisory and Securities (India) Pvt. Ltd.	24.59	7.89
JM Financial Institutional Securities Pvt. Ltd.	24.56	7.76
Motilal Oswal Financial Services Ltd.	24.62	7.50
ICICI Securities Ltd.	24.53	7.44
Average	24.56	7.76

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Shubhayan Bhattacharya 

 

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