HDFC Bank, India's largest lender by market share, declared its financial performance for the second quarter of FY27, posting a 4.7% year-on-year rise in standalone net profit to Rs 19,510 crore. The earnings slightly trailed market expectations primarily due to subdued treasury earnings and an uptick in provisions. Excluding treasury trading gains, the bank's profit after tax registered an underlying growth of roughly 12.6% compared to the quarter ended September 30, 2025.
Net Interest Income and Revenue Trends
Core operational income demonstrated steady momentum during the quarter under review. Net interest income, representing the spread between interest earned and interest expended, climbed 9.7% to Rs 34,620 crore from Rs 31,550 crore reported during the corresponding period of the prior financial year. Net interest margins were recorded at 3.16% on total assets and 3.32% on interest-earning assets.
Total top-line revenue advanced to Rs 48,450 crore in Q2FY27, up from Rs 45,900 crore reported in Q2FY26. Other income, which comprises non-interest revenue streams, stood at Rs 13,830 crore for the quarter ended September 30, 2026.
Asset Quality and Credit Provisioning
The private lender allocated Rs 3,574 crore towards provisions and contingencies against non-performing loans during the quarter. This represents an 18.7% sequential rise from Rs 3,010 crore set aside in the June 2026 quarter, and a 2.1% increase compared to Rs 3,501 crore allocated in Q2FY26. The total credit cost ratio for the quarter ended September 30, 2026, settled at 0.44%.
On the asset quality front, gross non-performing assets improved to 1.11% of gross advances in Q2FY27 (0.87% excluding the agricultural book). This metric stood at 1.17% in the previous quarter (0.91% excluding agriculture) and 1.24% in Q2FY26 (0.99% excluding agriculture). Net non-performing assets came in at 0.37% of net advances as of September 30, 2026.
Growth in Deposits and Loan Book
Mobilisation of funds showed resilience, with average deposits reaching Rs 3,166,400 crore in the September 2026 quarter. This reflects a 16.8% year-on-year expansion from Rs 2,710,500 crore in the September 2025 quarter, and a 5.1% sequential uptick from Rs 3,011,500 crore registered in the June 2026 quarter.
Gross advances expanded by 16.3% year-on-year to touch Rs 3,219,500 crore as of September 30, 2026. Total advances under management recorded a growth of 15.3% over the same reference date in 2025. Across loan categories, retail lending rose 11.7%, commercial advances to small and mid-market enterprises surged 23.5%, and corporate wholesale books expanded by 16.4%. Overseas advances accounted for 3.3% of the overall loan mix.
Capital Position and Operational Footprint
Under Basel III regulatory parameters, the bank's total Capital Adequacy Ratio stood at 18.9% for the quarter, comfortably above the regulatory threshold of 11.9%, though lower than the 20.0% reported in Q2FY26. Tier 1 capital ratio came in at 17.2%, while the Common Equity Tier 1 ratio was pegged at 17.1% as of September 30, 2026. Risk-weighted assets were valued at Rs 3,179,300 crore.
The lender continued to maintain an extensive physical footprint across India. By the close of September 30, 2026, its branch network spanned 9,706 locations alongside 20,881 automated teller machines spread across 4,177 cities and towns.
Market Valuation and Trading Performance
Prior to the weekend earnings announcement, shares of HDFC Bank ended the trading week on BSE at Rs 728.10 each, pegging the lender's market capitalisation at Rs 11,22,628.07 crore. Over the October 12-16 trading stretch, the equity added 2.50%, though it remains down by 26.5% on a year-to-date basis. In the United States, HDFC Bank's American Depository Receipts closed down 1% overnight at $23.60 on the New York Stock Exchange. Domestic markets are scheduled to price in these quarterly figures on Monday, October 19, 2026.
