Top Stocks Alert: Axis Bank, HDFC Life, HDB Financial, Hero MotoCorp Q2 Earnings

The markets are keeping a keen eye on major corporate announcements, with the latest developments from the financial and automotive sectors drawing particular attention. Recent quarterly results and strategic moves by companies like Axis Bank, HDFC Life Insurance Company, HDB Financial Services, and Hero MotoCorp have positioned them as key stocks to watch.

Axis Bank: Profit Dip Amid One-Time Provisions

Axis Bank, one of India’s largest private sector lenders, recently reported a significant 26% year-on-year (YoY) decline in its standalone net profit for the second quarter of the current fiscal year (Q2 FY26), posting a profit of ₹5,090 crore. This sharp drop comes despite a marginal 2% YoY rise in the bank’s core measure of profitability, Net Interest Income (NII), which stood at ₹13,744 crore.

The primary factor behind the substantial profit decline was a massive 61% spike in provisions and contingencies to ₹3,547 crore. A key component of this was a substantial one-time standard asset provision of ₹1,231 crore related to two discontinued crop loan variants, following an advisory from the Reserve Bank of India (RBI). Management, however, expressed confidence that these provisions would be reversed as the secured loans are repaid over time.

On the positive side, the bank showed an improvement in asset quality, with both gross and net non-performing asset (NPA) ratios declining sequentially to 1.46% and 0.44%, respectively. Fee income also demonstrated resilience, rising 10% YoY.

Investor Focus: The market’s reaction has been mixed. While the immediate focus is on the elevated provisions, investors will be watching for the bank’s ability to maintain its asset quality and grow its retail loan book, as its recent loan growth was largely driven by the corporate segment. Brokerage views remain diverse, suggesting continued volatility as the bank navigates these one-off provisioning events.

HDFC Life Insurance Company: Profitability Capped by GST Impact

HDFC Life Insurance Company also announced its Q2 FY26 results, reporting a relatively modest 3% YoY increase in standalone net profit to ₹447 crore. The insurer’s total premium income grew a healthy 14% YoY to ₹19,287 crore, driven by a strong 17% rise in renewal premium, indicating robust customer retention. The Value of New Business (VNB), which reflects the profitability of new policies, saw an 8% YoY rise to ₹1,009 crore.

The subdued profit growth was primarily attributed to a one-time impact from recent changes in the Goods and Services Tax (GST) exemption on existing policies. The company’s management clarified that excluding this GST-related drag, the profit growth would have been substantially higher. They expect this GST impact to diminish progressively over the next few quarters.

Key Metrics & Strategy: The company’s overall market share increased by 90 basis points to 11.9%. While the solvency ratio saw a sequential dip, it remains comfortably above the regulatory minimum. The insurer’s focus on passing on the benefits of the GST exemption and its strong growth in individual and group new business premium demonstrate a strategy aimed at long-term volume and market share gains, despite short-term margin pressures.

HDB Financial Services: Steady Performance and Impending IPO

HDB Financial Services, an unlisted subsidiary of HDFC Bank, continues to be a crucial stock to watch, largely due to its impending Initial Public Offering (IPO). For Q2 FY26, the financial services player reported a marginal 1.6% YoY degrowth in net profit at ₹581.4 crore. However, its core performance metrics pointed to strength, with Net Interest Income (NII) surging 19.6% YoY to ₹2,192.5 crore.

The growth in NII was supported by a robust expansion in its Asset Under Management (AUM), which grew 12.8% YoY to ₹1,11,721 crore. The company’s core business remains resilient, backed by its deep synergy with HDFC Bank in lending and support services. HDB Financial also declared a 20% interim dividend (₹2 per share) for the fiscal year, signaling confidence in its earnings stability.

IPO Buzz: The company is reportedly gearing up for a major IPO, with market speculation suggesting a significant public issue in the coming months, which is a key driver of investor interest in its unlisted shares. The successful listing of its parent company’s other subsidiaries has set a high benchmark, making HDB Financial a highly anticipated market debut.

Hero MotoCorp: Global Expansion and Festive Season Optimism

India’s largest two-wheeler manufacturer, Hero MotoCorp, is focusing on strategic expansion and a strong rebound in domestic sales. The company has announced its official entry into the Republic of Spain, marking its foray into the 50th international market. This move, in partnership with Noria Motos, includes the introduction of its Euro 5+ models, underscoring its push into Europe and global premium segments.

Domestically, Hero MotoCorp is anticipating a bumper festive season, with executives projecting it to be one of the best in recent years. The company is confident of maintaining its market leadership in the domestic two-wheeler segment, driven by a positive macroeconomic environment, a strong pipeline of new product launches (including the expansion of its premium portfolio like the Harley-Davidson X440 variants), and growth in its core 100cc segment.

Furthermore, the company is making significant strides in electric mobility with its VIDA V1 e-scooter, with over 46,662 units sold in the calendar year 2024. Hero MotoCorp’s strategy clearly involves a multi-pronged approach: strengthening its core commuter segment, scaling up its premium offerings, and accelerating its electric vehicle (EV) play.