HDB Financial Services Posts 12% Share Price Surge Following Q4 Earnings Beat, Brokerages Lift Target Price
HDB Financial Services Shares Surge 12% After Q4 Results
HDB Financial Services, a non-banking lender, reported strong results for the January-March quarter (Q4) of the financial year 2025-26 (FY26), leading to a significant jump in its share price. On Thursday, the company's shares rallied as much as 12.38% to ₹724 apiece on the BSE.
The company's net profit for the fourth quarter of FY26 stood at ₹751 crore, marking a growth of 41.4% from ₹531 crore in the year-ago period. HDB Financial Services' interest income in Q4FY26 rose 13% year-on-year (YoY) to ₹4,081 crore from ₹3,623 crore. The company's Asset Under Management (AUM) increased by 10.7% to ₹1,18,733 crore as on March 31, 2026, from ₹1,07,262 crore as on March 31, 2025.
| Financial Metric | Q4FY26 | Q4FY25 | YoY Growth |
|---|---|---|---|
| Net Profit (₹ crore) | 751 | 531 | 41.4% |
| Interest Income (₹ crore) | 4,081 | 3,623 | 13% |
| AUM (₹ crore) | 1,18,733 | 1,07,262 | 10.7% |
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The company's Gross Loan Book grew 10.9% YoY to ₹1,18,493 crore as on March 31, 2026. The board of directors of HDB Financial Services recommended a final dividend of ₹2 per equity share of the face value of ₹10 each for FY26. Additionally, the board approved borrowing up to ₹32,825 crore by the issuance of debt securities on a private placement basis, in one or more tranches.
Despite geopolitical tensions, HDB Financial Services' management indicated that there has been no material impact so far, with performance in March 2026 remaining stable. However, the situation remains fluid, and the company will continue to closely monitor any potential second or third-order impacts over the coming weeks/months.
Analysts believe that HDB Financial Services reported a healthy quarter, with a meaningful pickup in disbursements, even as the overall loan growth remained muted due to elevated repayments. Asset quality improved sequentially, while margins expanded by around 15 bps QoQ, supported by a decline in cost of funds.
Brokerage firm Motilal Oswal estimates a CAGR of 14%, 16%, and 20% in disbursement, AUM, and PAT over FY26-28, with RoA and RoE of ~2.5% and 14.3% in FY28E. The firm reiterated its 'Neutral' rating on HDB Financial Services shares but raised the target price to ₹720 apiece.
JM Financial believes HDB Financial Services is at an inflection point, with a notable improvement in asset quality and a pickup in disbursements. Consequently, it revised FY27-28E EPS estimates upwards by 3%, and values the company at 2.1x FY28E BVPS in return for ~15% AUM CAGR and ~15% RoE over FY26-28E. The brokerage firm maintained an 'Add' rating and raised HDB Financial Services share price target to ₹710 apiece from ₹650 earlier.
At 9:50 AM, HDB Financial Services share price was trading 8.40% higher at ₹698.30 apiece on the BSE.
Investor Takeaway
Investors should consider HDB Financial Services as a potential beneficiary of the strong Q4 earnings.
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