TLDR
- HDFC Bank’s Q1 net profit rose 12.2% to ₹181.55 billion (~$2.11B)
- The bank declared a Rs 5 per share special dividend
- Bonus shares approved; one share for every one held
- Loan growth at 6.7% despite industry slowdown
- Stock closed at $75.28 on July 18; dividend record date set for July 25
HDFC Bank Ltd. (NYSE: HDB) closed at $75.28 on July 18. The lender posted a 12.2% increase in standalone net profit to ₹181.55 billion (~$2.11 billion) for the April–June quarter.
This jump was fueled by higher interest income and treasury gains. Net interest income climbed 5.4% year-over-year to ₹314.38 billion. The earnings report was released on July 20, 2025.
Other income also played a major role, doubling to ₹217.29 billion. The rise was attributed to trading gains and strong fee-based revenues. Despite higher earnings, provisions for bad loans surged nearly fivefold to ₹144 billion. HDFC clarified that these provisions were largely precautionary and not due to actual bad loans. The bank described them as a countercyclical buffer to fortify its balance sheet.
Dividend and Bonus Share Announcement
On Saturday, the board approved a special interim dividend of Rs 5 per share for FY26. The record date is July 25, and the payout will be made on August 11. This is HDFC Bank’s first special dividend since 2019. In June, the bank paid a Rs 22 final dividend for FY25.
HDFC Bank also declared a 1:1 bonus issue, marking the first in its history. Shareholders will receive one bonus share for each share they own, with the issuance date to be announced. These shareholder rewards highlight the bank’s confidence in its capital strength and future prospects.
Loan Growth Amid Sector Pressures
Despite broad concerns in the Indian lending sector, HDFC Bank’s overall loan book grew 6.7%. Loans to small and medium-sized enterprises rose by a notable 17.1%, supporting local business growth.
However, the industry has faced rising defaults in unsecured lending and microfinance, forcing banks to set aside more provisions. Axis Bank, for instance, recently reported a spike in bad loans following an asset benchmarking exercise.
Shareholding and Market Performance
Foreign institutional investors own 48.84% of HDFC Bank, while over 3.6 million small retail investors hold 10.3%. The stock has gained 17.37% year-to-date, outperforming India’s SENSEX index, which rose 4.63%. One-year return stands at 24.72%.
Despite this, long-term performance remains moderate, with five-year gains at 63.31% versus 120.85% for the SENSEX.
Strategic Moves and Outlook
HDFC Bank recently sold a ₹10,000 crore stake in its NBFC arm, HDB Financial Services, through an IPO-linked offer for sale. These funds may enhance capital buffers ahead of stricter regulatory norms.
The strong quarterly performance, shareholder rewards, and strategic capital moves suggest HDFC Bank is preparing for growth while remaining cautious amid evolving credit risks.
