HDB Financial Services, a prominent non-banking financial company (NBFC) and a subsidiary of HDFC Bank, has announced robust financial results for the third quarter of fiscal year 2026, ending December 31, 2025. The company reported a significant 36% year-on-year (YoY) increase in its Profit After Tax (PAT), reaching ₹644 crore for the quarter. This impressive profit growth was primarily driven by a strong 22% rise in Net Interest Income (NII), which stood at ₹2,285 crore for Q3 FY26, compared to ₹1,872 crore in the corresponding quarter of the previous fiscal year. The company's total gross loans also demonstrated healthy expansion, growing by 12% YoY to ₹1.14 lakh crore as of December 31, 2025, up from ₹1.02 lakh crore a year ago. Assets under management (AUM) also grew by 12% to ₹1,14,853 crore. Operating performance remained healthy, with the pre-provisioning operating profit rising 23% YoY to ₹1,573 crore. However, the company did report a softening in asset quality, with Gross Stage 3 loans increasing to 2.81% as of December 2025, from 2.25% a year earlier. Net Stage 3 loans also rose to 1.25% from 0.9%. Provision coverage on Stage 3 assets declined slightly to 55.59% from 60.02%, indicating a modest reduction in buffers. Despite these asset quality challenges, the overall results underscore HDB Financial Services' strong core income growth and expanding loan book.