Motilal Oswal's research report on HDB Financial Services
HDB Finance (HDBFIN)’s 2QFY26 PAT declined ~2% YoY to INR5.8b (in line). PAT in 1HFY26 declined ~2% YoY, and we expect 2HFY26 PAT to grow ~45% YoY. NII in 2QFY26 grew ~20% YoY to ~INR21.9b (in line). Other income rose ~14% YoY to ~INR6.6b (in line). Opex grew ~12% YoY to ~INR13.2b (in line). The cost-to-income ratio in the lending business declined ~2pp QoQ to 40.7% (PQ and PY: 42.7%). PPoP stood at INR15.3b and grew 24% YoY (~5% beat).
Outlook
HDBFIN currently trades at 2.5x FY27E P/BV. We estimate a CAGR of 12%/17%/24% in disbursement/AUM/PAT over FY25-28, with RoA/RoE of ~2.5%/15% in FY27. Reiterate Neutral with a TP of INR820 (premised on 2.6x Sep’27E BVPS).
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