The leading non-banking financial company (NBFC) on Wednesday reported a 41% surge in its net profit to Rs 751 crore in Q4 FY26 from Rs 531 crore reported in the same quarter of the previous financial year. The subsidiary of HDFC Bank, meanwhile, saw its net interest income (NII) rise 22% year-on-year (YoY) during the quarter under review.
Along with the Q4 results, HDB Financial Services announced a final dividend of Rs 2 per share for FY26. Its board also approved fundraising of Rs 32,825 crore through the issue of debt securities in one or more tranches.
Several brokerages issued bullish calls for HDB Financial Services following its strong earnings announcement for the January-March quarter of the financial year 2026.
Jefferies on HDB Financial Services
International brokerage Jefferies noted HDB Financial’s profit beat its estimate by 3%. While assets under management (AUM) growth eased to 11%, disbursement growth picked up. “NIMs (14bps QoQ) surprised positively on lower CoF. AQ trends improved across segments,” it added.
Jefferies highlighted that the company’s management flagged no major impact from the war between Iran and the US on its growth or collections, although the international brokerage factored in some drag. It expects a pick up in AUM growth, lower credit costs and range-bound NIMs to drive 22% EPS CAGR and ROE expansion to 15%+ by FY28.
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Jefferies kept a ‘Buy’ call on the shares of HDB Financial, but cut its target price to Rs 845 apiece from the earlier Rs 900 apiece. The latest target price implies an upside potential of more than 31% from the stock’s previous closing price of Rs 644.30 apiece.
Morgan Stanley on HDB Financial Services
Morgan Stanley maintained its ‘Equal weight’ rating on the shares of HDB Financial Services, with a target price of Rs 720 apiece, implying an upside potential of nearly 12% from the stock’s previous closing price.
The international brokerage said that the company’s earnings beat estimates, driven by strong profit growth and stable margins. The 22% YoY growth in NII was driven by improvement in spreads, while asset quality improved sharply with lower slippages and stronger provision coverage, it noted.
Morgan Stanley further noted that the company’s credit costs moderated with the outlook of further normalisation, adding that stage 2 and stressed asset formation trends are showing durable improvement.
Emkay Global on HDB Financial Services
Emkay Global said that HDB Financial Services reported a strong Q4 in terms of profitability, ahead of consensus and its estimates, although AUM growth remained soft, indicating management’s focus on maintaining profitability at the cost of growth.
It highlighted that asset quality improved significantly, resulting from easing stress in the CV and USL segments and the company’s ability to control forward flows, which in turn led to lower credit cost and subsequent profitability.
The brokerage noted that the company’s management reiterated that it aspires to grow its loan book at approximately 6-7% over and above the nominal GDP, adding that such growth will be supported by strong disbursement across the product segment. Also, the management expects margin to be stable as disbursements in the USL segment normalise, though it indicated that the West Asia conflict would be a key monitorable, it added.
“To reflect the Q4 developments and management commentary, we tweak our FY27-28 estimates, which leads to ~2-3% increase in earnings,” it said. Emkay Global maintained its ‘Reduce’ call on the stock with an unchanged target price of Rs 625 apiece, implying a downside potential of nearly 3% from the stock’s previous closing price.
JM Financial on HDB Financial Services
JM Financial said that HDB Financial Services continues its cyclical recovery, reporting a robust quarter with profit beating its estimate by 4%, driven by lower-than-expected opex and improved asset quality metrics. “We believe HDB is at an inflexion point, with a notable improvement in asset quality and a pickup in disbursements. Consequently, we have revised our FY27-28E EPS estimates upwards by 3%, and value the company at 2.1x FY28E BVPS in return for ~15% AUM CAGR and ~15% RoE over FY26-28E,” it said.
The domestic brokerage hiked its target price for the stock to Rs 710 apiece from the earlier Rs 650 apiece, while maintaining its ‘Add’ rating. The latest target price implies an upside potential of more than 10% from the stock’s previous closing price.
Motilal Oswal on HDB Financial Services
Motilal Oswal Financial Services maintained its ‘Neutral’ rating for the shares of HDB Financial Services, but hiked its target price to Rs 720 apiece, implying an upside potential of nearly 12% from the stock’s previous closing price. The domestic brokerage said that the firm’s net profit and NII were in line with its estimates.
HDB Financial Services zooms 12% on strong Q4 results and FY26 dividend
“Management shared that the sequential decline in yields during the quarter was driven by a change in the product mix, and it expects improvement in yields as growth in unsecured segments picks up,” the brokerage noted. “Management indicated that there has been no material impact from geopolitical tensions so far, including within the MSME segment, with performance in Mar’26 remaining stable. However, the situation remains fluid, and the company will continue to closely monitor any potential second or third order impacts over the coming weeks/months,” it added.
The domestic brokerage said that the company is witnessing improvement across key operating metrics, with better asset quality, moderating credit costs, and improving margins. However, overall loan growth remained relatively subdued, impacted by elevated repayments despite healthy disbursements, it added. “While the business trajectory is improving, the pace of recovery in loan growth continues to be gradual. We await a clearer and more sustained traction in loan growth before turning constructive on the stock, as a meaningful acceleration in loan growth will remain a key monitorable for a valuation re-rating,” Motilal further said.
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