HDFC Bank Q2 Preview: Profit Could Rise ~9%, But Margin Pressure Is Real — 9 Metrics to Watch

enters Q2 FY26 with tempered optimism. Analysts expect net profit (PAT) growth up to ~9% YoY, while net interest income (NII) may rise by ~6%, though margin squeeze is a key risk. Here are 9 vital metrics that will determine the tone of its results: Key Metrics to Watch 1. PAT vs NII Growth A higher growth ratio of PAT relative to NII would indicate strong non-interest income or effective cost control. 2. Net Interest Margin (NIM) With interest rate pressures and funding costs rising, maintaining or mitigating decline in NIM will be crucial. 3. Credit Growth / Advance Book Growth How aggressively the bank has lent in retail, corporate, and priority segments versus peers. 4. Deposit Growth & Cost of Deposits (CoD) The pace and pricing of incremental deposits will influence funding stress and margin buffer. 5. CASA Ratio Trends Any movement in Current Account + Savings Account share will affect low cost funding prevalence. 6. Fee / Non-Interest Income Diversification into fee income (debit/credit, bancassurance, processing) can offset interest headwinds. 7. Asset Quality / GNPA, NNPA, Provisioning Monitor if slippages have accelerated, write-offs increased, or provisions remain manageable. 8. Credit Cost & Return Ratios Credit cost (provisions / average loans) and RoA / RoE will reflect true earnings health. 9. Guidance & Commentary Forward commentary on rate outlook, provisioning buffer adequacy, and capital deployment will move markets. Closing Note HDFC Bank is walking a tightrope: balancing growth, maintaining asset quality, and defending margins in a rising cost environment. If the bank can deliver within these nine metrics, it could reinforce confidence in its resilience. If not, even decent growth might not translate into durable returns. Source: The Economic Times No Recommendations