HDB Financial shares fall 1% after Q2 results: Should you buy, sell or hold?

HDB Financial Services share price

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26 Aug, 2025 12:21

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The newly-listed shares of HDB Financial fell more than 1 percent on October 16 after the company released its results for the July-September quarter of the financial year 2026.

The shares of the subsidiary of private lender HDFC Bank, hit a day's low at Rs 733.25 apiece on Thursday. The stock, which debuted on stock markets in July, has now fallen more than 12 percent since listing.

HDB Financial Q2 results:

HDB Financial Services reported a 1.5 percent decline in net profit at Rs 581 crore for the quarter under review, hurt by higher loan losses and provisions. The NBFC had reported net profit of Rs 591 crore in the year-ago period.

The firm's revenue rose 13 percent YoY to Rs 4,545 crore in Q2 FY26, as against Rs 4,007 crore in the year-ago period. The newly-listed company also announced an interim dividend of Rs 2 per share for FY26. It has set October 24 as the record date to determine the eligibility of the shareholders set to receive the payment.

Should you buy, sell or hold?

Morgan Stanley kept an equal-weight call on the stock, with a target price of Rs 805 per share. This implies an upside potential of more than 8 percent from the stock’s previous closing price. The brokerage raised FY26 EPS estimate by 4 percent, but cut FY27 and FY28 EPS estimates by 0.4 percent and 3 percent, respectively.

Jefferies kept a ‘Buy’ call on the stock, with a target price of Rs 900 per share. This implies an upside potential of more than 21 percent from the stock’s previous closing price.

The international brokerage said that the firm's Q2 profit after tax missed estimates. AUM growth moderated to 13 percent YoY, while net interest margin (NIM) rose 20 bps QoQ. Asset quality slipped QoQ due to higher CV portfolio stress, it added.

Growth and asset quality are expected to improve in the second half of FY26 due to GST cuts and activity normalization, Jefferies said.

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