HDFC Bank Q2 FY27 profit rises 5.2% to ₹19,610 crore, misses estimates
Synopsis
HDFC Bank's Q2 FY27 profit grew 5.2% to ₹19,610 crore — but the headline growth masked an earnings miss. With NII below consensus, NIM compressed at 3.16%, and provisions nudging higher, the bank's post-merger margin story is proving harder to execute than markets had hoped, even as loan and deposit growth remain impressively strong.
Key Takeaways
HDFC Bank posted a net profit of ₹19,610 crore in Q2 FY27 , up 5.2% year-on-year but below analyst estimates.
Net interest income (NII) rose 9.7% to ₹34,619 crore , missing the consensus estimate of ₹34,991.51 crore .
Net interest margin (NIM) stood at 3.16% ; provisions climbed 2.1% to ₹3,574 crore .
Gross NPA ratio improved to 1.11% from 1.24% a year ago; net NPA improved to 0.37% from 0.42% .
Gross advances grew 16.3% to ₹32.20 lakh crore ; average deposits rose 16.8% to ₹31.66 lakh crore .
HDFC Bank shares are down about 10% over the past year and 12% year-to-date at ₹728.10 .
HDFC Bank, India's largest private sector lender, reported a net profit of ₹19,610 crore for the second quarter of FY27 (July–September 2026), marking a 5.2% year-on-year increase — but falling short of analyst expectations as higher provisions and softer-than-anticipated net interest income weighed on the headline numbers.
Earnings Miss on Key Metrics
Net interest income (NII) — the gap between interest earned and interest paid — climbed 9.7% year-on-year to ₹34,619 crore, coming in below the analyst consensus estimate of ₹34,991.51 crore. The net interest margin (NIM), measured against total assets, stood at 3.16% for the quarter ended 30 September 2026.
Provisions rose 2.1% year-on-year to ₹3,574 crore, up from ₹3,501 crore in the corresponding quarter last year, adding further pressure on the bottom line.
Asset Quality Improvement Stands Out
Despite the earnings miss, the bank's asset quality metrics showed a notable improvement. The gross non-performing asset (NPA) ratio declined to 1.11% as of 30 September 2026, down from 1.24% a year earlier. The net NPA ratio also improved, moving to 0.37% from 0.42% in the same period last year — a signal that the lender is cleaning up its loan book even as credit costs tick upward.
Loan and Deposit Growth Remains Robust
On the business momentum front, HDFC Bank continued to post strong expansion. Average advances under management grew 14.1% year-on-year to ₹31.87 lakh crore, while gross advances at the end of September surged 16.3% to ₹32.20 lakh crore.
Retail loans increased 11.7% from a year ago, with lending to small and mid-market enterprises registering a sharper 23.5% expansion — pointing to a deliberate push into the high-growth SME segment.
On the liabilities side, average deposits climbed 16.8% year-on-year to ₹31.66 lakh crore. Average current account and savings account (CASA) deposits grew 10.7% to ₹9.71 lakh crore.
Stock Performance and Market Context
Shares of HDFC Bank ended flat at ₹728.10 on the BSE on Friday — the session ahead of the results. The stock has declined approximately 10% over the past year and is down roughly 12% year-to-date, underperforming the broader banking index even as its balance sheet has continued to expand post the merger with erstwhile HDFC Ltd.
This result arrives at a critical juncture: the bank is navigating the post-merger integration phase while managing margin compression in a high-interest-rate environment. With NIM under pressure and provisions elevated, analysts will closely watch whether management guidance signals a margin recovery in the second half of FY27.
Point of View
But margin and provisioning metrics suggest the post-merger integration tax is not yet over. The NIM at 3.16% is structurally lower than pre-merger HDFC Bank levels, and the market has already priced in disappointment — reflected in a 12% year-to-date stock decline. The real question is whether the SME lending push, which grew 23.5%, will eventually reprice the book upward or introduce fresh credit risk in a slowing economy. Until NIM stabilises and provisions trend clearly downward, the earnings-per-share story will remain unconvincing to institutional investors.
NationPress
17 Oct 2026
Frequently Asked Questions
What was HDFC Bank's net profit in Q2 FY27?
HDFC Bank reported a net profit of ₹19,610 crore for Q2 FY27 (July–September 2026), a 5.2% rise year-on-year. The figure missed analyst expectations due to higher provisions and softer net interest income.
Why did HDFC Bank miss analyst estimates this quarter?
The earnings miss was driven by net interest income of ₹34,619 crore, which came in below the consensus estimate of ₹34,991.51 crore, and provisions that rose 2.1% year-on-year to ₹3,574 crore. Together, these two factors offset the otherwise robust loan and deposit growth.
How did HDFC Bank's asset quality change in Q2 FY27?
Asset quality improved: the gross NPA ratio fell to 1.11% from 1.24% a year earlier, and the net NPA ratio improved to 0.37% from 0.42%. This suggests the bank is successfully reducing its stock of bad loans even as credit costs remain elevated.
How fast did HDFC Bank's loans and deposits grow?
Gross advances grew 16.3% year-on-year to ₹32.20 lakh crore, while average deposits rose 16.8% to ₹31.66 lakh crore. SME lending was the standout, expanding 23.5% year-on-year.
How has HDFC Bank's stock performed recently?
HDFC Bank shares closed at ₹728.10 on the BSE on the day before results, having declined approximately 10% over the past year and around 12% year-to-date — underperforming the broader banking index.
