HDFC Bank Ltd.: Strong Momentum, Growth Acceleration Ahead | Q3 FY26

HDFC Bank delivered a solid Q3 FY26 performance with management expressing strong confidence about accelerating growth in FY27. The loan-to-deposit ratio improved to approximately 96%, firmly on track to meet the targeted 90-96% range for FY26 and 85-90% for FY27. Cost of funds declined by 10-11 basis points sequentially, providing a margin tailwind. Asset quality remained best-in-class with gross NPA slippages at just 24 basis points excluding agriculture, demonstrating pristine credit quality. Card spend showed robust momentum with 15% year-on-year growth, led by discretionary spending at 21% growth indicating healthy consumer confidence. The bank added 1-1.5 million new liability relationships during the quarter while maintaining over 9,600 branches. Management guided for FY26 credit growth in line with the system at approximately 11%, followed by acceleration to 14-15% in FY27, outpacing the expected system growth of 12-13%. Branch productivity improved significantly to Rs 305 crore per branch from Rs 237 crore previously, with 43% of branches under five years entering a high-growth phase. The liquidity coverage ratio stood strong at 116%, well above regulatory requirements.

Key Highlights

• LDR target on track: 90-96% for FY26, targeting 85-90% in FY27
• Credit growth to accelerate: FY26 in-line with system, FY27 at 14-15% (faster than system)
• Cost of funds declined 10-11 bps QoQ; asset quality best-in-class at 24 bps slippages
• Card spend up 15% YoY; discretionary spending surged 21% showing consumer confidence
• Added 1-1.5 million new liability relationships; branch productivity up to ₹305 Cr