(MENAFN- IANS) Mumbai, July 15 (IANS) HDB Financial, a subsidiary of HDFC Bank and a recently listed upper-layer NBFC, on Tuesday posted a net profit of Rs 567.7 crore for the quarter ended June 30 (Q1 FY26) -- a 2.4 per cent drop compared to Rs 581.7 crore in the same quarter previous year (Q1 FY25).

However, the profit showed improvement on a sequential basis, rising 7 per cent from Rs 530.9 crore in the March quarter of FY25, according to its stock exchange filing.

The dip in year-on-year (YoY) profit came despite healthy growth in revenue and net interest income, as higher provisioning impacted the bottom line.

The company's net interest income (NII), which is the difference between the interest it earns and the interest it pays, rose 18.3 per cent YoY to Rs 2,091.8 crore.

It was also higher compared to Rs 1,972.8 crore in the previous quarter, as per its filing.

Total revenue from operations grew 15 per cent year-on-year to Rs 4,465.4 crore and increased 4.6 per cent compared to the March quarter.

HDB's pre-provisioning operating profit stood at Rs 1,402 crore in the June quarter, up 17.2 per cent from Rs 1,196 crore a year earlier.

However, the company's loan losses and provisions rose significantly to Rs 670 crore in Q1 FY26 from Rs 412 crore in Q1 FY25.

The provisioning coverage ratio on stage 3 assets declined to 56.70 per cent from 60.24 per cent a year ago.

The company's loan book remained strong, with total gross loans rising 14.3 per cent to Rs 1,09,342 crore as of June 30, compared to Rs 95,629 crore a year ago.

Similarly, its assets under management (AUM) grew 14.7 per cent to Rs 1,09,690 crore.

HDB Financial's shares, which were listed on the Indian stock market on July 2, ended the day slightly lower at Rs 841.10 on the Bombay Stock Exchange (BSE), down 0.4 per cent.

Despite the dip, the stock is up nearly 14 per cent from its IPO price of Rs 740.

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