HDFC Bank stock weighs deposit mix after Q2 profit growth

HDFC Bank reported a 4.7 percent year-over-year increase in standalone net profit to INR 195.10 billion for the July-September quarter of FY27. Business Standard reported the result on October 17, noting that stronger core interest income was partly offset by lower treasury gains, higher operating expenses and provisions.

HDFC Bank stock traded at EUR 19.50 on Lang & Schwarz at 09:46 Berlin time on Friday, October 30, 2026.

Core income outpaces reported profit

Net interest income rose 9.7 percent year over year to INR 346.20 billion, supported by 16.3 percent growth in gross advances. Other income fell 3.6 percent to INR 138.30 billion, with treasury trading gains dropping to INR 7.80 billion from INR 23.90 billion a year earlier. Fees and commissions increased to INR 96.90 billion from INR 88.40 billion.

The bank's net interest margin stood at 3.16 percent of total assets and 3.32 percent of interest-earning assets. Operating expenses increased to INR 189.70 billion from INR 179.80 billion, while provisions and contingencies reached INR 35.70 billion. These figures explain why balance-sheet expansion translated into more modest bottom-line growth.

Deposits lead balance-sheet expansion

End-of-period deposits rose 18.8 percent year over year to INR 33.27 trillion as of September 30. Time deposits increased 22.8 percent to INR 22.76 trillion, while current account and savings account deposits grew 10.8 percent. CASA deposits represented 31.6 percent of the total deposit base.

Gross advances reached INR 32.20 trillion, up 16.3 percent from a year earlier. Retail loans grew 11.7 percent, small and mid-market enterprise loans advanced 23.5 percent, and corporate and other wholesale loans increased 16.4 percent. Asset quality improved, with the gross non-performing asset ratio at 1.11 percent, compared with 1.24 percent a year earlier and 1.17 percent in the June quarter.

Management points to margin recovery

Outgoing managing director and chief executive Sashidhar Jagdishan said the bank had seen strong underlying momentum in retail and small-business banking and expected the margin trajectory to turn upward from the next quarter. His comments came as Anup Bagchi took over as managing director and chief executive on October 27.

Bagchi said the post-merger balance sheet and broader transformation remained works in progress, although much of the journey was behind the bank. He also acknowledged the planned departure of deputy managing director Kaizad Bharucha at the end of December.

Investor focus shifts to execution

The quarter gives investors a combination of healthy lending growth, resilient asset quality and pressure on reported profitability from treasury income and margins. The next test for HDFC Bank is whether the new leadership can sustain loan growth while improving the funding mix and restoring margin momentum.

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