HDFC Bank shares fall 2% as net interest margin hit new lows of 3.1%, net profit jump 4.7% YoY

HDFC Bank shares opened flat on Monday, but pared the early gains to trade 2% lower at ₹712 apiece on the NSE, after the country’s largest private sector lender posted mid-single-digit growth in profitability for the quarter ended September 2026. Besides this, the bank’s Deputy Managing Director, Kaizad Bharucha’s, exit from January 2027, is also expected to drive sentiment on Monday.

HDFC Bank Q2FY27 results

The bank posted steady growth in net interest income of 10% at ₹34,649 crore for the quarter ended September 2026, as compared to ₹31,559 crore for the quarter ended September 2025. Besides this, the non-interest income for the quarter declined 3.6% YoY to ₹13,800 crore.

The net-interest margin on the interest-earning assets for the quarter stood at 3.3%, down 10 bps from 3.4% in the same period last year. The total net interest margin also fell 10 bps to 3.2% compared with 3.3% in the same period last year.

The marginal dip in the margins can largely be attributed to a 20 bps fall in the overall yield on assets at 7.6% for the quarter, as compared to 7.8% in the same period last year and 7.7% in the previous quarter. Declining yield on assets remains a major headwind for the country’s largest private sector lender.

The asset quality for the quarter remained largely stable at 1.1% GNPA and 0.4% NNPA, improving from 1.2% and 0.4% in the same period last year and sequentially. Additionally, the bank added fresh slippages of ₹6,100 crore.

Lastly, the net profit jumped 4.7% YoY to ₹19,510 crore as compared to ₹18,600 crore in the same period last year. The profitability growth was sustained largely due to 2.1% growth in provisioning at ₹3,570 crore for the quarter.