HDFC Bank posts 5% profit rise in Q1, provisions fall sharply
Steady loan growth of 15.4% and stable asset quality at 1.17% GNPA underpin the quarter, but net interest margin held at 3.26%, in line with expectations.
— 4 earlier stories on HDFC Bank Ltd. →What's new
- Net profit ₹19,060 cr, up 5% YoY from ₹18,155 cr
- Provisions drop to ₹3,060 cr from ₹14,442 cr (large floating provision last year)
- GNPA improves to 1.17% from 1.40% YoY
Why this matters
A clean quarter with no surprises. Loan growth remains strong at 15.4%, asset quality is improving, and the sharp fall in provisions (helped by a one-off last year) boosts earnings. Still, NIMs at 3.26% show little expansion, a key metric to watch.
What we're watching
- NIM trajectory: any expansion would signal better yield management
- Deposit growth vs loan growth gap: deposits rose 14.7%, loans 15.4%
- Provision coverage ratio trends in coming quarters
The full read
HDFC Bank's Q1 FY27 numbers have a familiar shape: ₹19,060 crore of net profit, 5% higher than last year, powered by 6.7% NII growth and a provision bill that went from ₹14,442 crore (which included a one-off floating provision) to ₹3,060 crore. Loan book expanded 15.4% to ₹30.6 lakh crore while deposits grew 14.7%. Gross NPAs improved to 1.17% from 1.40%. The headline profit growth is cushioned by the provision swing. Strip that out, and underlying earnings appear more moderate. The net interest margin of 3.26% held steady: no deterioration, but no expansion either. For India's largest private bank, this is a routine quarter. The open question is whether NIMs can move higher from here as the cost of deposits stabilises.
Questions answered
- How did HDFC Bank's Q1 profit compare to expectations?
- The standalone net profit of ₹19,060 crore was broadly in line with market expectations, showing steady 5% YoY growth.
- Why did provisions fall so sharply?
- Provisions dropped to ₹3,060 crore from ₹14,442 crore a year ago partly because the year-ago quarter included a large floating provision. Excluding that, the decline is less dramatic.
- What is the net interest margin trend?
- NIM stood at 3.26% of total assets, unchanged from previous levels, indicating stable but not improving core lending profitability.
- How is asset quality evolving?
- Gross NPAs improved to 1.17% from 1.40% a year ago, reflecting continued credit discipline and a clean book.
HDFC Bank Ltd.
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All notes on HDFCBANK →- 18 Jul 2026 · 2:24 PM IST HDFC Bank posts 5% profit rise in Q1, provisions fall sharply
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