HDFC Bank Limited Q1 FY2026 earnings call

Macro Environment

• Global situation volatile with weak growth outlook; India relatively better placed with stable macro, supported by normal monsoons, income tax cuts, benign food inflation.

Performance

• Average deposits grew 16% year-on-year; slowed average advances/AUM growth to 7% last year to reduce credit deposit ratio from 110% to 95%; advances growth improved to 8% in Q1 FY '26.
• Growth engines: customer centricity, technology, people. Asset side ~70% floating, liability side fixed, impacting margins due to rate cycle lead-lag; asset quality healthy. HDB Financial Services listed; interim dividend of INR 5 per share and 1:1 bonus share announced.

No detailed breakdown of product segment financial performance with absolute terms and revenue contribution % provided in the transcript.

Growth

• Expect loan growth to continue improving; FY '26 loan growth in line with system; FY '27 loan growth higher than system.

Margins

• Expect margin stabilization over time despite quarterly fluctuations from rate cycle impact.

• Volatile global situation with tariff-related and geopolitical uncertainties; impact of rate cycle lead-lag on margins.

Q: On margins, method of repricing on EBLR and growth trigger?

A: Repricing of EBLR loans takes time; growth triggered by monetary/fiscal policy support, improved consumption demand, festival season, etc.

Q: On CRB loan classification, NPA recognition, credit cost?

A: Portfolio allocation rejigged; NPA recognition follows RBI norms; credit cost benign, likely to revert to mean but timing uncertain.

Q: On CASA deposits, lending franchise?

A: CASA affected by deposit priorities post-merger, focus on upselling to improve CASA; lending franchise has minimal overlap with HDB, high card penetration for cross-sell.

Q: On employee addition, segments, margins?

A: Employee addition due to branch openings and sales force ramp-up; segments with growth opportunities; margins impacted by deposit duration and rate changes, visibility over quarters.

Q: On loan growth, fee income, cost to income?

A: Disbursal growth in non-mortgages strong; fee income timing-dependent; cost to income a priority, expected to improve over time.

Q: On CD ratio, contingent provision, asset quality?

A: Target CD ratio 85%-90%; contingent provision for resiliency; asset quality benign, especially in non-agri segments.

Q: On 20-F debt, PSL, NIMs trough?

A: 20-F includes subsidiaries, not stand-alone; PSL actively managed; NIMs trough depends on rate cuts and repricing, to be viewed annually.