HDB Financial Q3 Results: Profit Jumps 36%, But Downgrades and Price Target Cuts Follow

• HDB Financial Services reported a 36% year-on-year jump in Q3 profit to ₹644 crore, driven by steady loan demand and stable asset quality.
• Net interest income increased 22.1% to ₹2,285 crore, and assets under management rose 12% on-year, with margins expanding by 15 basis points QoQ.
• Despite profit growth, loan growth at 12.2% was lower than the previous quarter's 13%, and disbursements grew by only 10% YoY, below management's 18-20% CAGR aspiration.
• Asset quality remained stable with Gross Stage 3 loans at 2.81%, but credit costs are still above the company's normalized range.
• Motilal Oswal maintained a 'Neutral' rating, while Emkay Global downgraded the stock to 'Reduce' and cut its price target to ₹750, citing concerns over loan growth and profitability.

Why It Matters: HDB Financial saw strong Q3 profit growth but faced analyst downgrades due to subdued loan growth and future concerns.