News

I think there is very little upside, and risks are more to the downside than to the upside from current levels. In our view, there is stress in the vehicle finance portfolio, both from a growth as well as from an asset quality perspective in the near term. And we do believe earnings could be weaker, especially for vehicle finance, NBFCs in the near term, and HDB indeed has a good 50% of the mix exposed to various vehicle segments. So that’s the challenge here. And clearly it looks like there is not much money to be made from current levels based on our fair value assessment of HDB financial services, increasing risks to the downside.

Gross Stage 3 Loans amounted to 2.26% of Total Gross Loans as at March 31, 2025, which was an increase from 1.90% as at March 31, 2024

Customers may default on their repayment obligations or may delay payments due to various factors. HDB also experience a drop in collection efficiency.

Asset quality will be a key monitorable.

– One of the leading, diversified retail-focused NBFC

– Categorized as an Upper Layer NBFC (NBFC-UL) by the RBI

– Three business verticals: Enterprise Lending (~40%), Asset Finance (~37%) and Consumer Finance (~23%) (data as of 1HFY25 as per DRHP)

– One of India’s largest and fastest growing customer franchises with customer base of 192 lakh customers

Shares of HDB Financial Services have opened lower on the day of its earnings announcement.

The stock is trading below its flat line in the early minutes of the trading session.

“The parent HDFC Bank may have to decrease its holding from 74.2% (post-issue @ UB) to less than 20% in a span of two years, according to the draft circular by the RBI, which was issued on October 4, 2024,” SBI Securities had said in a pre-IPO note.

Emkay had initiated coverage on HDB Financial Services with a “buy” rating and a price target of ₹900.

It said that HDB Financial is well positioned to improve profits and growth.

A favourable interest rate cycle driving NIM expansion, credit cost moderation, and growth outlook improving are some key positive factors.

Out of the nine trading sessions that HDB Financial Services has had, including its listing day on July 2, the stock has declined in five of them.

The stock has closed in the green in the other four sessions.

HDB Financial Services had allotted 4.5 crore shares to anchor investors at a price of ₹740 per share.

Anchor investors include marquee names like LIC, ICICI Prudential, Abu Dhabi Investment Authority (ADIA),SBI MF, Nippon Life, Government Pension Fund Global.AUM (₹ Crore)FY25Four=year CAGRHDB Financial1,06,90020.3%Chola Finance1,84,74633.9%Shriram Finance2,63,19027.5%Bajaj Finance4,16,66129.4%

At the current price, HDB Financial Services trades at a one-year forward price-to-book multiple of 3.4 times which is lower than larger peers like Bajaj Finance, but higher than others like Shriram Finance.

HDB Financial Services listed at a 13% premium compared to its issue price of ₹740.

The stock made a post-listing high of ₹891 on its second-trading day, implying a growth of 20% from its issue price.

However, the stock is down 5% from those levels and is back at its issue price.

The first three trading sessions of HDB Financial Services saw volumes that were between 4 crore to 8 crore shares.

However, volumes since then have declined, with the last three sessions witnessing an average volume of 30 lakh shares being traded.

Shares of HDB Financial Services had ended Monday’s trading session 0.4% lower at ₹842.1.

Close to 34 lakh shares of the company changed hands during Monday’s trading session.

The stock has declined in three out of the last four trading sessions.

In the few days since it became a public company, HDB Financial’s shares have continued to trade around its listing price of ₹840 per share, which is a 13% premium to their issue price of ₹740 per share.

Having made a post-listing high of ₹891 on just its second day of trading, HDB Financial shares have corrected 5% from those levels.

HDFC Bank’s non-bank lending unit, which recently made its stock market debut, will be reporting their first quarterly results later today.

There are a lot of factors to keep an eye out for from the earnings statement.

Good morning!

Welcome to CNBC-TV18’s live coverage of HDB Financial Services’ first quarter results.

This will be their first earnings statement after listing earlier this month.

Watch this space for all the live updates.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.