HDFC Bank profit rises 5% as asset quality improves

Research Analyst: UJVIN NEVATIA (PROPRIETOR: NEVAT INVESTMENTS) | SEBI Registration No.: INH100009628 HDFC Bank Limited (

) reported a 4.7% year-on-year increase in standalone net profit to ₹19,510 crore in Q2 FY27. Net interest income (NII) grew 9.7% to ₹34,619 crore. What happened? Net revenue reached ₹48,450 crore, while operating profit before provisions increased 5.6% to ₹29,483 crore. Gross advances grew 16.3% year-on-year to ₹32.20 lakh crore, and deposits rose 18.8% to ₹33.27 lakh crore. Asset quality improved, with the gross non-performing asset (GNPA) ratio declining to 1.11% from 1.24% a year earlier. However, lower treasury trading income and higher provisions weighed on earnings growth. Why does it matter? Strong loan and deposit growth indicates continued business expansion. Improving asset quality is also encouraging. However, slower profit growth despite higher NII highlights the impact of other income, operating expenses and provisions on overall earnings. My view Core banking growth remains healthy, but the next challenge is converting that growth into stronger profitability. Deposit costs, margins and non-interest income will be important in assessing performance. What I am watching next I would track NII, net interest margins, deposit growth, operating expenses and credit provisions to assess whether earnings growth strengthens in coming quarters. No Recommendations Source: Business Standard Disclosure: I, my entity, associates or relatives do not have any holding, position or other material interest in HDFC Bank Limited.