HDFC Bank Q2 FY27: Consolidated PAT +5.6% YoY to ₹20,700 Cr as treasury gains fade

HDFC Bank's consolidated net profit for the quarter ended September 30, 2026 rose 5.6% YoY (+7.6% QoQ) to ₹20,700 Cr, on consolidated net revenue of ₹78,690 Cr. On a standalone basis — the Bank's core operating entity — PAT grew 4.7% YoY to ₹19,510 Cr, landing within Street expectations: brokerages had modelled standalone PAT of roughly ₹19,370–19,606 Cr (Zeebiz, Bloomberg consensus), with some previews flagging a near-flat outcome on NIM pressure; the actual print came in modestly ahead of that bear case and essentially in line with consensus. The headline growth rate understates underlying momentum. Management explicitly disclosed that standalone PAT excluding treasury trading gains grew ~12.6% YoY, since treasury trading gains fell to ₹780 Cr this quarter from ₹2,390 Cr a year ago — a swing that dragged down the reported 4.7% figure rather than flattering it. Core banking income held up well: net interest income rose 9.7% YoY to ₹34,620 Cr, with NIM at 3.16% on total assets (3.32% on interest-earning assets) — broadly in line with management's prior guidance of "range-bound" near-term margins, sitting at the low end of the 3.3–3.4% range the Street had pencilled in. NPM (16.00%) and OPM (25.41%) both compressed YoY from 16.54%/26.09% a year ago, though both expanded sequentially from Q1 FY27 (14.46%/23.29%), consistent with the margin-pressure theme flagged ahead of the print. Cost-to-income ratio was 39.1%, credit cost ratio a low 0.44%, and asset quality kept improving — gross NPAs fell to 1.11% from 1.24% a year ago and 1.17% in Q1. Balance-sheet growth was on-plan: period-end deposits of ₹33.27 lakh Cr (+18.8% YoY) and advances-under-management growth of 15.3% YoY matched the pre-result ~₹33.3L Cr / ~₹32.2L Cr expectations almost exactly. Segment-wise, SME/MSME advances grew 23.5% YoY — ahead of the 22.3% pace guided last quarter — while corporate/wholesale advances grew 16.4%, a touch short of the 18% guided. CASA deposits grew 10.8% YoY, but the CASA ratio stood at 31.6% of total deposits, well below the 38% management had flagged (itself caveated as "subject to household deposit dynamics") — the clearest miss against prior guidance this quarter. Capital adequacy eased to 18.9% from 20.0% a year ago, partly reflecting the ₹7,390 Cr AT1 note call-back exercised on September 1. Subsidiaries were mixed: HDB Financial Services (+34.2% YoY to ₹780 Cr) and HDFC Securities (+26.1% to ₹270 Cr) outgrew the parent, HDFC Life grew a steady 13.6% to ₹510 Cr, while HDFC ERGO's PAT slipped to ₹160 Cr from ₹180 Cr. The quarter also closes out the leadership transition flagged ahead of results — Anup Bagchi formally took over as MD & CEO effective October 1, 2026, alongside a new Chief Compliance Officer and Group General Counsel appointed in the same week. That makes the next few quarters the first real test of strategic continuity under new leadership, against a backdrop where margin recovery — which management itself has pegged at 2-3 years via operating leverage — remains the central swing factor for the stock.