Results Highlights:
- Interest Earned up 8.78% YoY & 5.12% QoQ at ₹83426.60 Cr (Vs ₹76690.70 Cr YoY & ₹79362.78 Cr).
- Net Interest Income up 9.72% YoY & 3.24% QoQ at ₹34619.18 Cr (Vs ₹31551.5 Cr YoY & ₹33533.95 QoQ).
- NIM stood at 3.2% Vs 3.3% YoY and 3.3% QoQ.
- Operating Profit up 5.59% YoY & 4.67% QoQ at ₹29483.42 Cr (Vs ₹27923.6 Cr YoY & ₹28168.06 Cr QoQ).
- Provision up 2.09% YoY & 16.79% QoQ at ₹3573.62 Cr (Vs ₹3500.53 Cr YoY & ₹3059.76 Cr QoQ).
- Profit after tax up 5.20% YoY & 2.83% QoQ at ₹19609.96 Cr (Vs ₹18641.28 Cr YoY & ₹19069.72 Cr QoQ).
- Total Deposit up 18.76% YoY & 4.94% QoQ at ₹3327448.93 Cr (Vs ₹2801788.77 Cr YoY & ₹3170830.09 Cr QoQ).
- Total Advances up 16.36% YoY & 5.21% QoQ at ₹3195566.06 Cr (Vs ₹2746359.78 Cr YoY & ₹3037303.31 Cr QoQ).
- CASA Ratio stood at 31.6% Vs 32.3% YoY and 33.09% QoQ. And PCR stood at 67% Vs 67% YoY and 66% QoQ.
- As of September 30, 2026, the Bank’s Total Capital Adequacy Ratio (CAR) stood at 18.9% (vs. 20.0% YoY), comfortably exceeding the regulatory requirement of 11.9%. Tier 1 CAR reached 17.2%, CET1 ratio was 17.1%, and Risk-Weighted Assets totalled ₹31,793 billion.
- As of September 30, 2026, the Bank’s physical footprint expanded across 4,177 cities/towns with 9,706 branches (50% in semi-urban/rural areas) and 20,881 ATMs.
- Bank’s average advances under management up 14.1% YoY & 4.9% QoQ at ₹31,872 billion (Vs ₹27,946 billion YoY & ₹30,386 billion).
Assets Quality:
- GNNPA Stood at 1.11% Vs 1.17% QoQ and 1.24% YoY
- NNPA Stood at 0.37% Vs 0.41% QoQ and 0.42% YoY
Concall Highlights:
- Management anticipates a positive turnaround in Net Interest Margins (NIMs) beginning next quarter, indicating that recent margin compression represents a temporary trough. The quarter’s margin pressure was primarily driven by the full impact of non-retail asset expansion, strategic liability choices, and the mobilization of high-cost FCNR deposits.
- Asset quality remains the bank’s core unique selling proposition (USP), remaining exceptionally stable and well-insulated across varying macro-economic environments and credit cycles.
- A high proportion of variable-rate assets ensures quicker repricing on the asset side than liabilities. Full margin benefits from favourable rate cycles will materialize over several quarters as the balance sheet asset mix naturally rebalances toward higher-yielding retail loans.
- Incoming leadership plans to evaluate alternative liability and funding strategies to protect core retail liabilities while optimizing overall cost of funds.
- HDFC Bank successfully raised $11 billion in foreign currency non-resident (FCNR) deposits during recent mobilization windows, balancing cost and liquidity requirements.
- The bank intends to strategically expand its overseas physical footprint over time to improve offshore liability gathering capabilities and support cross-border trade flows.
- Management is evaluating a programmatic loan offloading strategy through sell-downs and securitization, contingent on favourable market conditions and institutional investor demand. Establishing a consistent securitization framework will enable the bank to price home loans more competitively and expand its market share against top-tier mortgage lenders.
- The corporate loan book continues to expand robustly, driven by active corporate relationships and comprehensive non-funded income cross-sell opportunities.
- Kharif crop sowing demonstrated resilience despite uneven monsoon distribution. Productivity gains from modern farming techniques are mitigating broader economic impact, while the agricultural lending book maintained complete quarter-over-quarter asset quality stability.
- In preparation for the April 1, 2027 Expected Credit Loss mandate, internal reviews confirm that the bank’s aggregate reserve architecture—encompassing specific, general, and contingent provisions—is comfortably positioned to meet all regulatory transition requirements.
- The high-cost wholesale debt inherited from HDFC Ltd will mature progressively over coming quarters, providing natural margin tailwinds as it is replaced by cheaper funding.
- Management recommended evaluating the bank primarily on Earnings Per Share (EPS) growth and Return on Assets (ROA) rather than isolated historical balance sheet ratios.
- Operating cost ratios (cost-to-asset and cost-to-income) are expected to decline as new branches mature and advanced technology investments deliver structural operating leverage.
- Third-party fee income streams remain healthy, and potential impacts from proposed bancassurance rules will be offset by larger distribution volumes and product diversification.
- Management expressed confidence in handling domestic climate risks like El Niño and ongoing global geopolitical instability due to the bank’s diversified loan book.
- The MSME segment continues to show healthy demand and strong asset quality, standing out as a high-margin growth driver for the institution.
- Capital expenditures on branch expansions over the past three years are reaching maturity, setting up accelerated retail deposit gathering.
- Management expects the full strategic and financial benefits of the merged balance sheet, technology upgrades, and branch buildout to materialize over the next two to three years.
Disclosure
InCred Markets Limited (“the Company”), Formerly known as Elite Wealth Limited (The company is Wholly Owned Subsidiary of InCred Capital Financial Services Limited) does/ does not do business with companies covered in its research reports. Investors should be aware that the Company may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.incredmarkets.com. Analysts employed by the Company are registered/qualified as research analysts with SEBI in India. (SEBI Registration No.: INH100002300)
Disclosure Appendix
Analyst Certification (For Reports)
Vindhyachal Prasad, InCred Markets Limited, vindhyachal@elitestock.com
The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in the Company.
As to each individual report referenced herein, the primary research analyst(s) named within the report individually certify, with respect to each security or issuer that the analyst covered in the report, that:
1. All of the views expressed in the report accurately reflect his or her personal views about any and all of the subject securities or issuers; and
2. No part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in the report. For individual analyst certifications, please refer to the disclosure section at the end of the attached individual notes.
Research Excerpts
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Ownership and material conflicts of interest Disclosure
InCred Markets Limited policy prohibits its analysts, professionals reporting to analysts from owning securities of any company in the analyst’s area of coverage. Analyst compensation: Analysts are salary based permanent employees of the Company. Analyst as officer or director: The Company’s policy prohibits its analysts, persons reporting to analysts from serving as an officer, director, board member or employee of any company in the analyst’s area of coverage.
Country Specific Disclosures
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Entities Disclosures
InCred Markets Limited (Formerly known as Elite Wealth Limited) (IML henceforth), is a SEBI Registered Analyst having registration no. INH100002300, having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, Telephone: 0120-4477777, and Website: www.incredmarkets.com. There is no material conflict of interest with the subject company. The company and the Research Analyst have no actual or beneficial interest of one percent or more in the subject company.
The Company discloses all material information about itself including its business activity, disciplinary history, the terms and conditions on which it offers research report, details of associates and such other information as is necessary to take an investment decision, including the following:
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