HDB Financial Services shares rallied sharply in early trade on April 16, rising over 11% after the company reported a strong set of Q4 FY26 earnings, driven by robust profitability and improving cost metrics.
The stock was trading at ₹702.95, up ₹58.65 or 9.10%, after opening higher and touching an intraday high of ₹723.95.
For the March quarter, Profit before tax stood at ₹1,011.2 crore, up from ₹704.2 crore in Q4 FY25.
Net profit for the quarter came in at ₹750.6 crore, registering a strong 41% year-on-year growth compared to ₹530.9 crore in the same period last year. Net interest income also saw a healthy 22% YoY increase, reflecting improved lending performance.
Operationally, the company reported customer growth of 19.7%, while its gross loan book expanded 10.9% YoY. Asset quality metrics remained stable, with credit cost at 2.50%, compared to 2.14% earlier, while the opex ratio stood at 3.78%.
Brokerages remained constructive on the outlook. Nomura maintained a ‘neutral’ rating with a target price of ₹740, noting that the company has likely moved past FY26 asset quality challenges and is now shifting focus towards growth. The brokerage also highlighted improvement in cost of funds, which could sustain in the near term.
Jefferies was more bullish, reiterating a ‘buy’ rating with a target price of ₹845. It highlighted that the ₹750 crore PAT beat estimates, aided by lower provisioning and improved operating costs. The brokerage also pointed to improving asset quality trends and a pickup in disbursement growth.
Jefferies expects a recovery in AUM growth, lower credit costs, and stable margins to drive a 22% EPS CAGR and ROE expansion to over 15% by FY28.
Overall, the strong earnings performance and improving fundamentals have driven a sharp rally in HDB Financial shares, with investors reacting positively to the company’s growth outlook and profitability trajectory.