HDB Financial Services shares ended 6 per cent after the company reported a robust set of Q4FY26 earnings and stable operational outlook.

It ended at ₹686 after rallying over 12 per cent in early trade on the NSE, climbing to ₹723.95 from the previous close of ₹644.30.

The sharp stock movement reflects investor confidence in improving asset quality, steady margins and expectations of a pickup in growth, as echoed by multiple brokerages.

Strong earnings and steady balance sheet growth

The company posted a net profit of ₹750.6 crore for the quarter ended March 2026, marking a 41.3 per cent year-on-year increase from ₹530.9 crore in the same period last year.The company posted a net profit of ₹750.6 crore for the quarter ended March 2026, marking a 41.3 per cent year-on-year increase from ₹530.9 crore in the same period last year. Net interest income rose 21.6 per cent to ₹2,399 crore, compared to ₹1,973 crore a year ago, supported by stable yields and improved funding costs.

In FY26, profit after tax stood at ₹2,543.8 crore, up 17 per cent from ₹2,175.9 crore in FY25.

Asset under management (AUM) grew 10.7 per cent year-on-year to ₹1,18,733 crore as of March 31, 2026, while the gross loan book increased 10.9 per cent to ₹1,18,493 crore, indicating steady expansion despite pockets of stress in select segments.

Management highlighted that business momentum remained healthy despite geopolitical disruptions during March 2026, with no visible slowdown in credit demand. While stress persisted in asset finance and unsecured personal loans, the company expects recovery and growth traction to improve in the coming quarters. It reiterated its medium-term AUM growth guidance at nominal GDP growth plus 6–7 per cent.

The firm continues to focus on expanding its used commercial vehicle portfolio while expecting the new CV segment to grow in line with industry trends. Unsecured business loans are likely to gain traction in FY27 as asset quality improves. Margins are guided to remain around 8 per cent, supported by stable yields and lower cost of borrowings, which declined 53 basis points year-on-year. Operational efficiency measures, including branch rationalisation and investments in technology, are expected to keep opex-to-AUM in the 3.7–3.8 per cent range.

On asset quality, the asset finance segment showed improvement, with gross stage 3 assets declining to 3.8 per cent in March 2026 from 4.3 per cent in December 2025, aided by recoveries and tighter risk controls.

Jefferies maintained a buy rating on the stock, trimming its target price to ₹845 from ₹900, citing expectations of a pickup in AUM growth, lower credit costs and stable margins driving earnings ahead.

JM Financial said the company is at an inflection point with improving asset quality and stronger disbursements, raising its FY27–28 earnings estimates by 3 per cent. It maintained an add rating with a revised target price of ₹710, factoring in around 15 per cent AUM CAGR and return on equity over FY26–28.

Motilal Oswal noted that while the quarter saw a healthy rise in disbursements and sequential improvement in asset quality, overall loan growth remained muted due to elevated repayments. The brokerage reiterated a neutral rating with a target price of ₹720, stating that valuations already factor in medium-term growth and that clearer execution on loan growth and sustained improvement in return ratios will be key triggers ahead.

Equirus Securities believes improving asset quality, stable margins and a revival in loan growth position the company for stronger profitability ahead. It expects around 18 per cent AUM CAGR over FY26–FY29 and return on equity of 16–17 per cent by FY28–29, while remaining cautious about potential macro risks from geopolitical tensions. Equirus retained a ‘Long’ rating and raised the target price to ₹775.

Published on April 16, 2026