HDB Financial Services Shares Slip Nearly 4% After Q1 Profit Decline

Shares of HDB Financial Services fell sharply on Wednesday, dropping nearly 4% after the company reported a decline in its first-quarter earnings for the financial year 2024-25.

The non-banking financial company (NBFC), a subsidiary of HDFC Bank, posted a 2.4% year-on-year drop in net profit to Rs 568 crore for the April-June quarter, compared to Rs 582 crore in the corresponding period last year.

Reacting to the earnings, the company’s stock fell 3.66% to Rs 810.30 on the BSE, while on the NSE, it closed 3.68% lower at Rs 810.25.

Despite stable interest income and loan growth, the marginal decline in profit appears to have spooked investors. Analysts noted that elevated provisions and a moderation in asset quality may have weighed on the bottom line.

Market experts believe the stock movement reflects investor caution amid broader concerns over the NBFC sector’s asset quality and the rising interest rate environment.

HDB Financial Services is a key player in retail lending and services including personal loans, gold loans, and consumer durable financing. It continues to be a strategically important entity for HDFC Bank, although its Q1 numbers suggest operational headwinds that could affect near-term sentiment.

Investors will now be watching how the company manages its asset quality and cost pressures in the coming quarters.